And Bushies, this will add a little fuel to the fire. What comes around, goes around !
Time get off your self-righteous morality high-horse and start paying a little more attention.
NewsMax.com
Saturday, Jan. 27, 2001
The debt bomb is ticking away as President Bush settles into office, and it could explode in his face and trigger a recession.
Americans are saddled with increasing financial obligations while at the same time the rate of their savings is declining.
One statistic that bothers experts is the tremendous increase in mortgage debt, which was about 35 percent of home value a decade ago but has skyrocketed to almost 50
percent today.
Financial analysts attribute the huge increase to an explosion of second mortgages, as homeowners borrowed on their home equity to pay off credit card and other debts.
Michael Peabody of Mitchell Securities told Business Week magazine that some 80 percent of the refinancings in the first nine months of last year resulted in boosting
mortgage debt amounts by 5 percent.
Most troubling is the huge increase in consumer debt, which jumped from an already high 28.2 percent of income in 1999 to 34.1 percent of income last year. With the economy
in a downturn, and available credit limits on credit cards at $2.4 trillion, analysts fear that many Americans will go deeper into credit card debt to make payments of essential
obligations such as home mortgages if times worsen.
Between 1989 and 1998, the percentage of families making payments equaling 40 percent of their incomes rose most sharply among senior citizens and families with
incomes of less than $50,000, according to Federal Reserve studies cited by Business Week.
By 1998, almost 14 percent of families in the $25,000 to $49,999 income brackets were struggling to make payments that amounted to more than 40 percent of their total
incomes.
What threatens the Bush economy most is the danger that real estate prices might drop, driving down homeowners’ equities and drying up their ability to refinance their
mortgages and use the proceeds to pay debts.
As Business Week observed, it will then "be like the early 1990s all over again: families in Southern California and in the Northeast who were mired in debt, but couldn’t sell
their houses for enough to pay off their mortgages."
Not to mention this: crbindex.com |
