Even though it’s Wall Street in the news, this economic crisis won’t only affect the million dollar big shots in the leather chairs.
Our Parent’s Jobs
According to the government, more than 600,000 people have lost their jobs this year and many more are expected to. Banks aren’t lending anybody money, which means businesses, even outside of Wall Street, could have a difficult time growing and this may lead to more layoffs. This will add to the 9.4 million people already unemployed in the US. Getting a job when the competition for one is stiff and businesses can’t grow is a nearly impossible feat.
Banks were approving mortgages for people who couldn’t afford to pay them back which means borrowers were/are living in houses way above their means. When people can’t pay the bank back their house is foreclosed and sold to pay back the money owed to the bank. If there’s anything left after the bank is paid back it goes back to the former owner. But after the recent housing collapse people are finding that their houses are worth less than their mortgages. So the banks take a loss and people are left with nothing. According to a New York Post article from June 2008, New York has a lower foreclosure rate than almost every other major US city. However, now after the collapse of NY based companies like the Lehman Brothers and Bear Stearns this rate is sure to go up.
Our School’s Budget
Our school budget is already tight but this crisis will only make it worse for a couple of reasons: 1) money for public education comes from property taxes. The decrease in property values will result in lower revenue for the city hence more budget cuts; 2) This multi-billion dollar federal bail out plan means the future president of the US probably won’t have much room for funding increases in education.
Our Future Jobs
Sooner or later we’ll have to support ourselves; meaning we’ll have to get jobs. Now you may say, “well I’ve got a while to go so no worries,” but the Great Depression lasted about 10 years. If the unemployment rate is high it will be even harder to get a job if you’re young and just entering the workforce.