What is the effect of the financial crisis on the USA economy?

Presently, unemployment is not bottoming out. Financial institutions still are not loaning money so businesses are still having difficulty buying inventories and keeping people employed. We still have bank failures, mergers and consolidations so unemployment in those sectors is not expected to stabilize during the first 3 quarters of 09. Housing prices are stabilizing in some markets, but those like mine in CA have not yet hit bottom largely because we had higher heights from which to fall. Local and state governments are really suffering major budget shortfalls as income, sales and property tax revenues are still declining.|||It slows down and results in more unemployment. Banks have difficulty returning loans to savers and both loose when the money runs out. With smaller earnings the government is expected to help more and to do this it borrows and prints more money, so there is inflation and prices tend to rise before this become endemic.





Eventually some part of the economy fails with either revolution or failure of the speculators and monopolists to keep land and natural resources unused. So when these vital resources are more easily available, people start to grow their own food again and can manage to survive before they become sufficiently wealthy that another round of land-grab starts.|||The US economy becomes topsy-turvy. The rich and the greedy aided by the government become richer and more powerful. The economy is more capitalistic and the poor becomes poorer. The financial crisis becomes worst and in a state of collapse.|||Haven't you been watching television or reading newspapers? Unemployment is at 8.9%, highest since 1982. About 500,000 people have lost their jobs every month for the last eight months. The national debt is at an all time high. The banks have had to be bailed out by the federal government along with General Motors, Chrysler, and a host of other financial institutions. The effect is catastrophic and nearly as dangerous as the great depression of 1929 through 1940. Let us hope we can solve this crisis within at least one year.|||About the same effect as the IRS confiscating your bank account and garnishing all your wages.





You are broke.


Right now, we are badly bent.