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The U.S economy doesn't even have fundamentals at this point. They were all foreclosed on... |
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The US is a debt economy meaning not only do we have massive debt at all levels (government and
individual) but we've postponed paying down that debt for decades and we've also had an on-going
competition to see who can afford to take on the most debt. That latter is the case with the
housing crisis in which it's really not a question of who had the most cash to pay for a house, it's
a question of who could borrow the bigger loan to do it, and that's a big part of the reason home
prices have grown for 20 to 30 years at a pace that far outstrips growth in salaries or savings.
And when they ran out of people who could borrow more and more they instead lowered the ceiling so
people who should never have qualified for the loans they got could get them, thus setting the stage
for this total collapse.
The core problem with the economy, with Wall Street, with homes, and with individuals is DEBT. And
the talking heads have told us for a quarter century that debt is not a bad thing at all, shoot,
look how much the US economy continues to grow despite all that debt. Well, it was a flawed
economic strategy to start with.
And borrowing MORE money to bail out Wall Street is actually continuing the original problem, and it
will not stop the recession/depression to come - it may just slightly delay it.
We're idiots people. When did we start to believe we could borrow for ever and just service the
interest for ever and ever? |
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Actually, they're not. The economy hasn't been strong for a long time, it's just been dressed up to
look like it, but Americans have been living in a pool of debt for decades, spending far more than
they take in and floating off of cheap and easy credit. The mortgage crisis was the straw that
broke the camel's back and brought the whole house of cards tumbling down and now Americans are
going to have to learn to live strictly within their means. This is going to mean a fundamental
restructuring of the American way of life as we learn that we're really much worse off than our
parents ever were, thanks to 20 years of bad Republican policies, especially to 8 years of our
government throwing away billions of dollars a day on an idiotic war. |
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24 Sep 2008 05:19
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