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To: kapkan4u who wrote (85651)	7/24/2002 12:43:38 AM
From: tejek	Respond to of 275872

The current debt levels are unprecedented already. Refinancing and spending the house equity is not a sustainable source of capital. The US stocks went from $17 trillion to $10 in two years. No rate cuts can compensate for that. There were only two bubbles before (three if you count the tulips): in 1929 in US and 1989 in Japan. We know what happened then. The history was quick to blame politicians, but I think that post-bubble depressions are inevitable because of huge destruction of wealth. I hope I am wrong on that. I hope you are too. No question, 1929 led to a depression whereas 1989 Japan resulted in a long term recession exacerbated and lengthened by poor gov'tal policies. Hopefully, we will avoid both pitfalls. ted

To: kapkan4u who wrote (85651)	7/24/2002 8:38:48 AM
From: Dan3	Respond to of 275872

Re: Refinancing and spending the house equity is not a sustainable Most definitely. But refinancing and keeping the principle borrowed the same, but lowering the monthly payment, increases the dollars available for household spending. Median household income in the US is a little over $42,000 per year. If 15 million mortgages are refinanced, with an average reduction in monthly payment of $100, the macro economic effect is similar to adding 1/2 million jobs. Which won't drastically change things, but it would sure help. Currently, I think that payroll taxes, which are a burden to employers as well as employees, are too high, and are hurting job creation which slows economic activity, in general. Ideally, gas taxes would be raised, reducing our dependence on foreign oil and improving our balance of payments, which would strengthen the dollar, and the funds from the gas tax would be used to lower payroll taxes. I expect our congress and president, given all of the oil company campaign contributions they receive, to do this only a few eons after hell freezes over....