Stutter Step
The economy is in a very precarious position. Many states are having trouble passing their budgets, putting many state employees and state funded private businesses one IOU paycheck from the edge. The mom who works in New York who has to keep going to work while the paychecks are no good or non-existent can’t pay for gas, food or rent. The gas station won’t take an IOU. The grocery store won’t take a “Wimpy payment” and hopefully the landlord is understanding – but they have bills to pay too. If enough tenants don’t pay on time the building could plummet into foreclosure forcing entire buildings of families out onto the street.
I believe the next big wave of foreclosures, adverse credit actions, and unemployment will come out of these state budget problems. I could be wrong, but I believe this newest ripple will have an effect for the next 16 months as people try to claw back to almost making it.
