The Economy Today: Will There Be Fireworks?

Headlines from Texas, Massachusetts, California, Nevada, and elsewhere

Despite growing foreclosures in Nevada and other parts of the country, some lawmakers are calling for an expanded tax credit to homeowners, USA Today reports. Traditionally, first-time buyers were eligible for an $8,000 credit, but realtor groups and some legislators want to grow that number to $15,000 and allow all homebuyers to benefit. Georgia Senator Johnny Isakson introduced a bill that would contain these changes to the Senate, and Texas Representative Kenny Marchant offers a House bill “to keep the $8,000 credit in place until June 2010 and expand it to all home buyers” along with “a $3,000 credit to homeowners who refinance.”

The Wall Street Journal finds that welfare rolls are growing in some parts of the country as a result of the recession: “The biggest increases are in states with some of the worst jobless rates. Oregon’s count was up 27% in May from a year earlier; South Carolina’s climbed 23% and California’s 10% between March 2009 and March 2008. A few big states that had seen declining welfare caseloads just a few months ago now are seeing increases: New York is up 1.2%, Illinois 3% and Wisconsin 3.9%. Welfare rolls in a few big states, Michigan and New Jersey among them, still are declining.” One policy analyst says this recession is the welfare system’s first test over whether or not it can adequately serve people in crises.

Some economic analysts are projecting that 10 percent unemployment rates may linger for another year, The Washington Post reports. Stimulus spending has yet to create enough jobs to affect the jobless rates, though the statistics are generating debate among analysts about their implications for the massive spending package: “There is a good economic argument to be made that the government has not done enough stimulus,” argues New America Foundation policy analyst Niko Karvounis.

In local headlines, Nevada’s foreclosure crisis continues. But one man’s tragedy is another man’s treasure: an Arizona real-estate agent who deals with foreclosed properties says business is booming. Meanwhile, in small towns throughout California, fireworks displays were on the chopping block as strapped local governments looked for ways to cut spending.

The recession is affecting patients’ medical decisions, the Massachusetts Daily News Tribune reports. Doctors say that fewer patients are having elective procedures, adopting a “wait-and-see” approach instead. Some patients are moving up appointments and procedures to make sure that they are treated as soon as possible, since they fear losing their jobs and benefits. On the flip side, doctors say that even those with insurance have avoided missing work to take care of medical issues.

In Texas, fundraising for the state’s colleges is meeting challenges in the face of the recession, The Houston Chronicle reports. Several large Texas schools, including the University of Texas and Rice University, announced huge fundraising campaigns before the recession was evident, and now don’t expect to gather the donations they need. This reflects a national trend: “donations to education dropped 5.5 percent in 2008, according to a report released last week by the Giving USA Foundation.”

Among California’s budget woes, the Fourth of July holiday will force some local governments to either stretch their funds or eliminate an annual favorite: fireworks. The North County Times reports that Oceanside, California, elected to cancel their display, saving $40,000 in the process, but Escondido’s show will go on despite the $30,000 price tag.

Nevada’s foreclosure crisis continues, The Las Vegas Sun reports. The new increase comes from the state’s commercial sector. According to one analysis, the state has “$9.7 billion worth of properties in distress and another $5.7 billion worth that have been resolved.” Land and hotel purchases make up the bulk of the total figure.

The Arizona Republic profiles a real-estate agent who specializes in foreclosed properties. Beth Jo Zeitzer was something of a local Dr. Doom, “telling people not to take all their equity out” and “the home wasn’t worth a quarter-million.” Now, this breezy contrarian works with banks eager to get foreclosed properties off their balance sheets. She’s in high demand: “She constantly carries with her a folder that lists the 400 or so properties she manages at any one time. The office fields more than two dozen solid offers a day. The receptionist gets more than 200 calls a day inquiring about homes. Around 8 on a recent morning, the robotic voice over the speakerphone told the receptionist she had 65 unheard messages.”

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Katia Bachko is on staff at The New Yorker.