There are quite a few U.S. cities that are complete and utter economic disaster zones in 2010 (Detroit for example), but there is something about the demise of Las Vegas that is absolutely stunning. In recent decades, Las Vegas has become a symbol for the over-the-top affluence and decadence of America. But now it is a microcosm of the economic nightmare that has gripped the entire nation. When the subprime mortgage crisis stuck, no major U.S. city was more devastated than Las Vegas. When the recession went from bad to worse, Americans decided that they really didn't need to gamble so much and casino revenues plummeted. Suddenly unemployment started to increase dramatically in Vegas and even today it continues to soar. Like so many other cities that are highly dependent on tourism and entertainment, Las Vegas has gone from boom to bust. Local officials are hoping that the worst will soon be over, but the truth is that the worst is yet to come. As the U.S. economy continues to unravel, average Americans will be spending what little money they do have to put a roof over their heads and to feed their families. The truth is that the glory days of Las Vegas are over and they are not coming back.
Already, the number of unemployed in Las Vegas is reaching unprecedented levels. Unemployment rates for the state of Nevada and for the city of Las Vegas both set new records during the month of April. In Las Vegas the unemployment rate in April was 14.2%. For the entire state the unemployment rate was 13.7%.
Of course those are just the "official" numbers. We all know that the "real" unemployment numbers are much higher.
For example, the "official" unemployment figure is about 14 percent in the state of Michigan right now. But if you actually believe that 86 percent of able-bodied workers in the state of Michigan are employed, then perhaps you would be interested in an offer to purchase the Golden Gate Bridge as well.
Elliott Parker, an economist at the University of Nevada, Reno says that the record-setting unemployment numbers in Nevada are just part of a larger trend....
"Nevada has been losing jobs since March 2008, and we are continuing to do so."
But where the state of Nevada and the city of Las Vegas have really been hammered is in the housing industry.
It is estimated that a whopping 65 percent of all homes in the state of Nevada are underwater.
Let that sink in for a bit.
65 percent of all home owners with a mortgage in the state of Nevada owe more than their homes are worth.
Talk about an implosion.
Nationally, the number of homes that are "underwater" is about 24 percent. That is an all-time record for the entire nation, but it doesn't come anywhere close to the nightmare that is unfolding in Nevada and in Las Vegas.
And the number of foreclosures taking place in Nevada is absolutely breathtaking.
According to RealtyTrac, Nevada is still ranked number one for foreclosure filings. In fact, one out of every 79 Nevada homes received a foreclosure filing in the month of May alone.
Nevada’s foreclosure rate is now five times the national average.
By just about any measure, the economy of Nevada is a complete and total disaster.
A reader recently sent an email describing the economic horror that is unfolding in Las Vegas. No matter what you may think about the city, the truth is that it is sad to see any great U.S. city fall to pieces like this....
Las Vegas is a goner. The homeless population is out of control. The real estate is far worse than I have seen in the media (no surprise there). The towers of condos are ninety five percent vacant with zero activity. The streets and parks are in decline. Local governments are busy making cuts and fighting unions. When I ride the streets they are deserted, a big change from 2006. The major casino companies have all but moved the casinos out of Nevada. Rooms and restaurants have been closing for years, even while they finished the new projects. The entire town is a skeleton staff providing substandard service and decaying properties. I still work for one of the majors which is in bankruptcy. When the next wave hits there is nowhere to cut. It will be a game of dominoes with the Wynn properties the only ones left standing. I see the ninety nine cent breakfast making a comeback. The bullet train a day late and a few billion dollars short.
So is there any hope for Las Vegas?
Well, if the U.S. economy gets back up off of the operating table and roars back to life there is little doubt that millions of Americans would once again soon be flying there to gamble away their discretionary income.
But the truth is that any "revival" that is going to happen in Vegas is going to be very short-lived.
The U.S. economy as a whole is caught in a death spiral, and we are about to see a repeat of the housing crash that devastated Las Vegas so badly the first time around.
No, there really isn't any way that the death of Las Vegas can be avoided. Just like the U.S. economy as a whole, it is inevitably doomed. The numbers don't lie.
The grand total of all government, corporate and consumer debt in the United States is now equal to 360 percent of GDP. That is a far greater level than the U.S. ever approached during the Great Depression.
The entire U.S. economy is a house of cards built on a gigantic pile of debt and paper money, and it is only a matter of time until it all comes crashing down.
But of course that isn't stopping the U.S. government from spending even more money and getting us all into even more debt.
According to a recent Treasury Department report to Congress, the U.S. national debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015.
But as many of you who have experienced this on a personal level know, getting into continually increasing amounts of debt never ends well.
So do any of you have a tale to tell about the city where you live? Do you find yourself caught in the middle of an economic nightmare? Feel free to leave a comment telling us what is happening in your area of the United States....