Will This Be The Second Great Depression?

By Melissa Howard

What is the difference between our time now and the Great Depression of the 1930’s?

A few key points:

1. In 1933, unemployment was up 25% and there were 14 million American’s out of work. In Rhode Island now, unemployment is at 11.2%.

2. In 1933, there was an abundance of foreclosures. In some areas, a sum of 200 farms was foreclosed on in a week.  Now it is said that there were 4,738 homes foreclosed on in Rhode Island last year.

3. In 1933, there were major droughts and a locust epidemic happening, killing most all crops and livestock through the mid-west.  For us now, it isn’t so much drought or locusts.

It’s the taxes from the state and Government, which is causing people to have a hard time affording the cost of food.

We have seen it all over the news, in the papers and on the web, about the budget crisis, unemployment and foreclosures. But what does this all mean?

Governor Chafee’s budget proposes to raise the state tax for services. Meaning, if you get your hair cut and it normally cost you $35.00, it will now cost you $42.00 plus tip. There is a long list of services that will be taxed. Not to mention, the price of food has gone up.
Many of us have to worry about how to pay rent, having enough food to feed ourselves and our children, or if they will have enough gas or bus fare to get to and from work, if you’re one of the lucky ones to have a job.

Unemployment is at 11.2%, the highest it’s been since the depression. Meaning more people are finding it hard to make the rent or mortgage payments resulting in people losing their homes.

HousingWorks Rhode Island put out a report on foreclosures in Rhode Island from January 2009 through December 2010. In their findings they found that 4,738 homes were foreclosured on. Of those, 1,213 were in Providence and 67% were multi-family properties. That translates to as many as 2,800 homes that were foreclosed on in Providence alone.

The foreclosure crisis has drastically reduced the chances for renters to find housing. According to the report, it is estimated that between 4,000-4,500 rents were affected by the lack of housing.

The HousingWork’s report states that houses within a 300-foot radius of a foreclosure property will lose up to 1% of their property value, totaling up $5.6 billion in lost wealth for Rhode Island families over just the last two years, pinching the already pinched penny.
More and more people are finding it harder to make it in today’s economy with everyone tightening their purse strings. What else is there for us to do?