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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Jim McMannis who wrote (251937)6/4/2010 5:43:07 PM
From: Elroy JetsonRead Replies (3) of 306849
 
Ronnie Raygun, as you refer to him, created this problem by growing government, business and consumer debt far faster than the growth of income.

This scheme was supposed to increase economic growth in the American economy, but in actual fact slowed it down - as any reasonable economist would expect.

But spending though both income and borrowed money did provide the illusion of prosperity which people fondly remember Reagan for. The 1981 "Grandpa has a new credit card" stimulus program was very popular - but has created the economic depression we are entering.

George H.W. Bush tried to rein it in, leading to an inevitable recession. Which gave us Bill Clinton and George W. Bush who knew that the key to popularity was expanding Reagan's credit bubble as quickly as possible. The stock boom under Clinton and a real estate boom under Bush - his so called "Ownership Society" where government would make sure everyone owned at least one home.

Bush's bank bail-out was wrong and Obama was stupid to continue it. Obama's worst error has been following the advice of the evil dwarf Larry Summers, just as Bill Clinton and Phil Gramm did.

Summer's "stimulus spending" has provided us merely a 6-month reprieve from the economic depression at the cost of a Trillion Dollars. Obama should have heeded Paul Volcker from the beginning and just provided basic support for the unemployed while the economy collapsed back to pre-credit bubble size.

The sooner we unwind the Reagan credit bubble, the sooner the pain is over.
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