There are many indicators in the United States economy that we are not recovering from this four year recession. The debt ratios of the average American have continued to go up as the average wage is continuing to go down. Currently, the average American has $16,000 in credit card debt. While, $16,000 doesn't sound like a lot of money, it's not telling the whole picture. The average American earns about $36,000 a year and this will need to pay off that $16,000 in credit card payments along with living expenses that are also on the rise. Many experts are predicting that this might be the new normal. The year ending on June 30, 2012 showed that there was 1.3 million Americans filing bankruptcy. Although, this number is down from the 1.5 million using bankruptcy last year, many are wondering if this is the calm before the storm.
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The US has had the benefit of having the dollar being used is a reserve currency for the world. This means all commodities are traded in US dollars at least up until recently. Many countries have been secretly making deals to trade using their own currencies and some are even using gold. In the past, any time the United States got into trouble, they would crank up the printing press and print a few million dollars to cover our debt. This isn't going to work anymore as most countries are tired of the true devaluation of our currency.
Just 40 years ago, the entire debt of the US was less than $2 trillion and this included government, business and consumer. Today it is 27 times larger and nearly $55 trillion. The scary thing is, most Americans don't even realize what is going on and believe that times are still pretty good. The country is basically flat broke and on the verge of filing bankruptcy because of the large amount of debt we have incurred over the years.
Here are a few reasons why Americans need to wake up and realize that no one is immune from bankruptcy. First, the unemployment rate has not dropped below 8% in the last 40 months. 42% of all unemployed Americans have now been out of work for at least six months. Because of the long-term unemployment, and these people have been eating up their 401(k)s and retirement to make ends meet.
Since the last presidential election, the economy has lost 1.3 million jobs while adding 3.6 million more to the SSDI program. In a recent survey by the National Association of Business Economics, it's stated that only 23% of all US companies plan to hire workers in the next six months. Added to that, the US manufacturing levels are now at the lowest level since June 2009. The US economic confidence index is now at the lowest it's been since January 2012. With municipalities and businesses nationwide filing for bankruptcy, who knows how bad it will get before it gets better.
The good news is filing bankruptcy is available to all Americans that are buried under a mountain of debt. Filing Chapter 7 bankruptcy is best for someone who makes a lower income or unemployed and has a large amount of unsecured debt. For the few that still have good jobs and got caught up in the last 10 years over extending themselves, there is always Chapter 13 bankruptcy. Both chapters of personal bankruptcy were instituted by Congress to give good hard-working Americans a second chance and a fresh start. It's time that people take control of their finances by talking to a bankruptcy attorney and get on the road to becoming debt-free.
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