America’s Financial defining moment
America once again is facing the historic and iconic ‘Black Tuesday’ of Oct. 29, 1929, 83-years later another defining moment in American financial history Tuesday Jan. 1 2013. On Monday Dec. 31, 2012 America would have reached its debt limit of $16.4 trillion dollars, Treasury Secretary Timothy Geithner displays eminent concerns in a letter to congressional leaders Wednesday Dec. 26, 2012, encouraging reasonable solutions on behalf of both political parties to avoid the fiscal cliff in addition to another credit-rating downgrade We have all said that it couldn’t and wouldn’t happen, America not being able to pay its debt obligations without continuous struggles and political posturing for the sake of their self-worth rather than that of the American people.
Party loyalty vs American People?
The Republican-controlled House passed a bill in August that would extend all the Bush-era tax cuts for one year. The House also approved legislation last week that’s an alternative to the automatic spending cuts.
The Democratic-run Senate passed a measure this summer that would extend the tax cuts only for individuals who earn less than $200,000 a year and families that make less than $250,000.
We’re seeing a very slow recovery, with increases in poverty among workers due to more new jobs which are low-wage,” Timothy Smeeding, a University of Wisconsin-Madison economist who specializes in poverty, told The Associated Press. “As a whole, the safety net is holding many people up, while California is struggling more because it’s relatively harder there to qualify for food stamps and other benefits.
As President Barack Obama is set to begin his second term, new statistics on America’s poverty rate indicate that nearly 50 million Americans, more than 16 percent of the population, are struggling to survive.
New figures released by the Census Bureau this week found a spike in poverty numbers last year, going from 49 million in 2010 to 49.7 million last year. The numbers may come as a surprise to Congress, which estimated in September that the poverty rate would drop to 46.2 million. One of the most startling findings showed that almost 20 percent of American children continue to live in poverty.
The Associated Press reports that the new figures are based on an updated formula devised by the Census Bureau to help give the government a better understanding for how to use safety-net programs.
Long-term Economic Impact
‘Black Tuesday’, Jan. 1, 2013, brings in a new year of old problems and old solution disguised with new political faces. Translation, more suffering for the American people, with unemployment finally at 7.7% which is debatable, in terms of perspectives from the employed, under-employed in addition to the millions of individuals not being included in the count because they are no longer eligible for state or federal funds. ‘Black Tuesday’ is also symbolic because of the tragic housing bubble; according to the National Real Estate Trends 1,529,525 homes are in foreclosure, the average foreclosure sales price is $195,016.
Which contributed to the ‘perfect economic storm’, the great recession the last historic financial event since the great depression, this depression hit hard every industry in the country leaving a lot of people jobless and homeless. Construction, production industries were hit first but even the agriculture industry was not spared. More than 750,000 farms were lost due to drop in the crop prices, which resulted in the bankruptcy of the farmers. Unemployment rate was all time high at 25 percent and more than 50 percent of children suffered from lack of food and medicines. Millions of Americans have already weathered the ‘horrific storms’ past and present in every aspect financially.
In addition to the crash of the stock market, the unfair distribution of money to workers was also a big factor. Big businesses were making big bucks but their workers were working for meager pay. Because of their low pay, these workers were compensated with credit, which followed the slogan “Buy now pay later”. This phrase really messed up the economy because without money to pay with, many workers fell into debt.
Follow the Leader
The most depressing part is that we have yet to reach the ‘eye of the storm’; the debt ceiling talks. America as a society has become unstable with very little shelter to return. We are a nation of many things, however greatness is lacking its luster we once boasted. In a statement after its meeting Wednesday, the House GOP leadership said: “The House has acted on two bills which collectively would avert the entire fiscal cliff if enacted. Those bills await action by the Senate. If the Senate will not approve and send them to the president to be signed into law in their current form, they must be amended and returned to the House,” which would then decide what to do.
Reacting to the House Republicans, Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid, D-Nev., said the Senate already had rejected the GOP’s “tea party bills, and no further legislation can move through the Senate until Republicans drop their knee-jerk obstruction.”
Foreclosure Rate Heat Map
U.S. Bureau of Labor Statistics