Monday, October 20, 2008

What Goes Around Comes Around - Or, Welcome to the New Depression

I'm immersed in economy stories right now. Local communities are trying to draw up proposed budgets and no matter how careful they've been in the past, they're going to be hurting. And if they haven't been careful, it's a bloodbath.

One city did a long-overdue revaluation this past year. The timing is proving to be awful, as many property owners face as much as a 14 percent hike in their taxes because of it.

It's worse in another city - they discovered that they've been overcharging commercial landowners for more than a decade. If those taxpayers sue, the city will go bankrupt. And whether they sue or not, the residential property taxes have to go up to where they should have been all along. Initially, that meant a 25 percent tax increase. The mayor knew that was unconscionable, so he slashed the budget to the bone and got it down to 8.5.

Then there's the housing crunch. Values are dropping, salaries aren't rising and people who bought homes they could barely (or just plain couldn't) afford once the economy crashed and some sources of income dried up are hanging on by their fingernails. Foreclosure counseling programs will tell you to start talking to your bank about restructuring your loan before you miss a payment. But good luck. Banks, even banks that are comfortably nestled in the loving arms of the feds, won't talk to you if you haven't missed a payment.

Catch 22.

HSO and I went to the UN last week to attend a black tie event honoring philanthropists. And even the Beautiful People are worried.

"What," a doctor who's travelled the globe to do good, "happens to giving when the money dries up?"

What indeed. It's called a depression for a very good reason, not the least of which is its emotional impact on everyone involved.

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