Birmingham business bankruptcies will increase in 2009, according to an article in The Birmingham News by Russell Hubbard.
In short, every one is cutting back; businesses and individuals. Purchase orders are down. Manufacturing is down. Unemployment is up. Most businesses (and individuals) have operated on very thin capitalization over the last decade, relying on lots of debt; this is coming back to haunt us. A slowing economy plus tightening credit is the “perfect storm” for many businesses; they just can’t survive. More business bankruptcies mean more job losses. Unemployed people have a hard time paying bills, which in turn leads to personal bankruptcy.
So here’s my question: If Congress passes the $1 TRILLION “bail-out bill” in a few weeks, where are we going to get the next TRILLION dollars we’ll “need” in late 2009 or 2010 when things are “really bad”? I’m not trying to be pessimistic; I’m simply asking a seemingly logical question. If things are going to get worse in 2009, won’t we need a “bail-out” even worse then? I’m sure people much smarter than me have already considered and planned for this eventuality, but then again…maybe they haven’t???
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