Everything people believed about the US economy has been turned upside down

The US economy is on its own as federal stimulus programs start to expire.

The federal tax credit for new home buyers expired in April, and sales of homes have all but collapsed by July — which should be the best season for real estate, at least historically.

According to an article by Robert Gavin in the Boston Globe, there is not much more help coming from Washington.

“As the stimulus fades away, we’re left with whatever momentum we have left from the private sector,’’ said Nigel Gault, chief US economist at IHS Global Insight in Lexington. “And there’s not much of that.’’

“Everything people believed about the American economy — you could always get a job, home prices never went down — has been turned upside down,’’ Connecticut banker Nick Perna said. “The housing market is partly a symptom of the lack of confidence overall.’’

In Massachusetts, for example, the number of small business loans fell by nearly half in June to 109, compared with 193 in May.

A dramatic turn-around is urgently hoped for by many, but no one can tell for certain when it will arrive. The more people who can right their ship and get back in the black the better. That’s where the bankruptcy laws can help, as fresh starts for the greatest number of people is really best for the common good.

Photo: Getty Images

 

By Doug Beaton

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