It’s stressful raising a family today, what with the threats of debt consolidation loans, foreclosures and unemployment hanging over so many households. Ben Bernanke, chairman of the Federal Reserve, is well aware of this. While speaking at a forum in Detroit, a city in which the jobless rate soared past 24 percent in April, Bernanke said that he’s worried about the stresses that unemployment and the still sluggish economy are placing on U.S. families. He also said that the Federal Reserve is trying to encourage banks across the country to lend to strong, small companies, something that would help reduce some of the economic stresses felt by so many.
Challenging Times
It’s little wonder that so many families are worried today about their finances. The national unemployment rate remained near 10 percent in early June. At the same time, a growing number of families are considering options such as debt consolidation to manage their rising credit card debt. Many families are struggling to pay their mortgage bills; last year saw a record number of housing foreclosures, according to online foreclosure company RealtyTrac.com.
Bernanke’s Concerns
During his speech in Detroit, Bernanke said that he understands the struggles that many families face today. “High unemployment imposes heavy costs on workers and their families, as well as on our society as a whole,” Bernanke said. Statistically, the Great Recession has ended. The problem is, it doesn’t feel as if the country is in the middle of a recovery. That’s because this particular recovery is a sluggish one, and it’s not creating jobs nearly quickly enough. As long as unemployment remains high across the country, people are going to feel economic pressure. It’s hard to feel confident in the national economy when you’re either out of work or worried that you’ll be out of work in the next month. It doesn’t help, either, when employers continue to force their workers to take unpaid days off during the year. Such furlough days can dramatically lower workers’ salaries, making it harder to pay all those bills.
Turning To Debt Consolidation
To survive these tough economic times, some consumers turn to debt consolidations. This is far from a perfect solution: Debt consolidation companies charge high interest rates to consolidate the debt of consumers. And taking out these loans lowers consumers’ credit scores, making it harder for them to borrow money at low interest rates in the future. Still, it’s at least one option to manage debt. And until the economy’s recovery picks up, and until unemployment falls, it might be the only option for some consumers.