A unique phenomena is happening with people strapped in debt: they have been paying their credit card bills before their mortgages. Forced by high energy prices and soaring adjustable mortgages they are faced with hard choices and the bankruptcy bill is guiding them to new behaviors. The bankruptcy bill passed by Republicans and signed by Bush was a huge government corporate welfare program for the banking industry. It makes it nearly impossible for people to declare bankruptcy and begin again.
The alternative they face is whether to allow their bank to take their home since that erases that debt from their financial portfolio. The credit card debt cannot be made to disappear so that is what homeowners are choosing to pay. This is fueling the foreclosure crisis along with the other factors. Congress is seeking to provide some relief from the onerous provisions of the current law and George W. Bush has threatened a veto.
The President said, again, that he doesn't think the country is in a recession. Is this denial or cluelessness? Maybe he needs to get more and meet real people, not those robotic clones collected for his fake "town halls."
Home foreclosures were up 57% in January from a year ago and prices are climbing on everything. Spring will provide some relief to people paying $500/month for heat but will be negated by $4/gallon gasoline. Sure, lots of people made bad decisions buying McMansions and huge cars and trucks but we cannot allow these failures to pull down the entire economy. That allows their bad decisions to seriously affect your financial situation.
One thing everyone needs to do is get financial savvy. Bookstores are filled with good tomes on personal finance. Go buy a few and learn what and how to properly manage your finances. Watching Gerri Willis' excellent advice on CNN is another resource.