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    Economic meltdown: Defining future strategies for travel nurses

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    Clearly, the United States economy is suffering a crisis. Americans received a staggering, almost unbelievable stream of disturbing, unprecedented economic news in 2008. First, there was the sub-prime mortgage meltdown and declining home prices, mortgage lender failures (Countrywide, GMAC, and IndyMac), the government seizure of Fannie Mae (FNMA) and Freddie Mac (FHLMC), and the global credit crisis. Then came the failures of investment bankers (Lehman Brothers, Merrill Lynch, Goldman Sachs, Bear Stearns, and Morgan Stanley); bailouts for AIG, banks, and the auto industry; and bank failures (Washington Mutual, Wachovia, CitiGroup, Downey Savings, Pomona First Federal, and others).

    For months into the crisis, politicians and government officials continued to assert that the economy was "basically sound"—until the stock market crash and recession announcement, which were the catalyst for business failures (DHL, Mervyns, Circuit City, and Linens 'N Things, among others), increasing unemployment and mortgage foreclosures, 401k losses, and state budget crises.

    Worried, upset Americans are asking themselves: How could this happen? Who's to blame? Why weren't we told? Have we bottomed out? What can the country do now? and, most importantly, What can I do now? And healthcare travelers are no different.

    What happened?

    It would appear that a lack of regulation and oversight in the mortgage, stock, and credit markets led to a surplus of cheap, available, under-scrutinized credit and securities. This event allowed individuals and businesses to over-extend and purchase homes that they were not financially capable of paying for, buy securities that exceeded their risk tolerance, and make credit card purchases beyond their ability to re-pay. Enter the recession.

    One of the by-products of a recession or a depression is deflation—the opposite of inflation. As jobs disappear, individuals and businesses pull back, credit tightens, and everyone spends less, decreasing demand and increasing surplus, so prices begin to fall. The presence of deflation is already evident in housing prices, gas prices, car prices, and early-season holiday sales. While deflation appears to be a good thing, especially for those individuals with the means to take advantage (including those who have cash reserves and those who still hold jobs), continued deflation tightens the job loss/business failure spiral.

    The housing market, however, remains over- inflated, with Congress sending out mixed signals. While the Mortgage Debt Relief Act of 2007 makes home mortgage debt forgiveness non-taxable, allowing taxpayers to "walk away" from their mortgages without tax consequences, it could possibly worsen the crisis. At the same time, the $7,500 "First-time Homebuyer Credit" encourages more people to get into the market, presumably to shore up the housing market and economy.

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