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Politics : Formerly About Advanced Micro Devices
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To: steve harris who wrote (370513)2/10/2008 8:43:20 PM
From: neolib  Read Replies (2) of 1577641
 
I agree, but I think our opinion would be rather far out on the distribution of what economist believe these days. A switch from consumption at or beyond the edge of income, to say 5-10% below income would I think, cause a depression. Is that not standard economic theory these days?

AFAIK, that is the whole problem with the subprime/real estate debacle. Since houses are not inflating, consumption is now going to fall closer to income levels, and that is a rather big problem given that much of the expansion of our consumer economy over the last 4-5 years was fueled by wealth inflation in real estate, and the concomitant mining of that for other uses.
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