People of the Great Recession: What It’s Really Like to Be a 99er, or a Strategic Defaulter

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They’re the two most-talked-about recession-era creatures: the unemployed American who has maxed out on 99 weeks of unemployment benefits, and the homeowner who can afford his mortgage but walks away from it anyway because the home no longer seems like a good investment. So what’s it really like to be one of these prototypical Great Recession characters?

Two stories provide some insights. The first is an op-ed in USA Today written by a 99er named Renata Selliti, a communications major who lost her job with Viacom during downsizing in 2008, who hasn’t worked much since, and who happens to be interning part-time with USA Today.

So what’s it like to have received 99 weeks of unemployment benefits, and to face the prospect of getting no further assistance? It ain’t fun. She gets especially stressed when the mail arrives:

For me, the worst part of being unemployed is getting the mail. This sad ritual of dodging a mountain of bills is even more dreaded than the other daily misery, finding creative ways to answer the question, “Where do you work?”

But she could get some sort of job, couldn’t she? Why doesn’t she just work at McDonald's, you might wonder? She answers:

The answer is simple. Looking for work that leads to a fulfilling career is a full-time job in itself, so removing ourselves from the search for 40 hours a week is an unwise detour. Also, it’s difficult to rationalize flipping burgers when you’ve invested years of your life into higher education and cultivating a strong career path.

It’s also quite possible that McDonald’s or any other minimum-wage employer wouldn’t hire her—because she’s overqualified, and the managers would assume that she’d leave the moment she found a better opportunity. All of which is true.

As to the idea that there are plenty of people out there perfectly happy to be collecting unemployment checks and getting fat off of their fellow taxpayers, Selliti quotes a sensible 41-year-old multimedia pro who’d been laid off:

“It’s a very specific type of craziness where you’d be fine with making one-third of what you used to make and feeling like you don’t have a function every day. I don’t think most people are inherently OK with that.”

Certainly, you have to have sympathy for hardworking people who can’t find employment that is fulfilling, or that at least pays the bills. But what about people who earn more than enough to pay the bills, but who suddenly decide to stop paying them because it’s in their financial interest?

After the real estate market crash, this is essentially what has been happening all over the country. Homes are underwater—meaning you owe more on the mortgage than the property is worth—and homeowners are naturally asking themselves: Isn’t it plain stupid to keep paying the mortgage? Why not just walk away, like many observers recommend?

An NPR segment tells the story of a couple on the verge of strategic default on their home in Mountain View, California, which they bought for nearly $1 million three years ago, and which has decreased in value by some $200K. The couple has asked the bank to reduce their interest payment, but the likelihood of that occurring seems remote, and more and more, they lean toward simply walking away—or perhaps utilizing the popular “free rent” approach, in which the homeowners stop paying the mortgage and wait for the bank to kick them out, which could take years.

The husband gives his justification for bailing:

“I personally feel like our money just evaporates; it’s as if we’re just throwing money away.”

And the wife explains how, increasingly, she procrastinates when it comes to paying the mortgage, and that one of these days she’ll put it off so long they’ll become strategic defaulters:

“Sometimes, if it falls on a weekend, I won’t make that payment until the following Monday. I mean, that’s how it’s gotten to me,” she says. “It’s like I don’t want to give them the money until the last possible minute. Maybe it’s going to be one day I’m not going to make that click. And it’ll be like, ‘Oh well, we just missed that payment.'”

They wouldn’t be the first to do so.

Strategic Default: The Irresponsible, Amoral, But Best Strategy?
Unemployment by the Numbers