According to an article in the Star-Telegram, the recession gripping the nation is predicted to worsen, with job losses, bankruptcies and foreclosures reaching record numbers even with the stimulus package pumping billions into the economy.
The article said:
The country stands to lose a sizable chunk of economic activity in 2009 as consumers at home and abroad retrench in the face of persistent economic troubles. And the U.S. unemployment rate – now at 7.6 percent, the highest in more than 16 years – is expected hit a peak of 9 percent this year.
That means millions of Americans facing job losses with no good prospects for replacement employment. We’ve never faced anything quite like this before in the history of this country. Of course we’ve experienced the Great Depression; but Americans at the time were not as leveraged as they are now (i.e. mortgage debt, credit card debt, medical debt , car loans, student loans, personal loans etc.)
If the predictions are correct we will see record numbers of foreclosures if Congress does not act now to give bankruptcy courts the power to modify toxic mortgages during bankruptcy. With a crisis on this level, our economy cannot afford to send millions of homeowners into foreclosure and subsequently onto the street. We need to act now to contain the foreclosure crisis or we could face a prolonged economic crisis with millions of homeowners facing foreclosure and in some cases, homelessness.