To: Cogito Ergo Sum who wrote (34517 ) 5/29/2003 7:15:49 PM From: bwtidal Respond to "Looks like I picked the wrong week to stop sniffing glue!" econ.bu.edu "Our government is going broke. The feds face bills that are far beyond our capacity to pay ? by $44 trillion to be precise. The longer we ignore them, the bigger they get. Yet President Bush is working overtime to deepen our fiscal trap... This $44 trillion figure is not ours. Nor is it some other academics' calculation. It was produced last fall by economists and budget analysts at the US Treasury, the Federal Reserve, the Office of Management and Budget, and the Congressional Budget Office... It's four times current GNP and 12 times official debt. Imagine everyone in the country working for four years and handing over every penny earned to pay this bill, and you'll grasp its size... (potential solutions include) raising federal income tax collections (individual and corporate) by 69 percent... raising payroll tax collections by 95 percent...news.ft.com Precis of the article above.ajc.com macleans.ca So it comes down to two big questions. (A) Will the economy start growing "normally" again, which would send mortgage rates back up to "normal" levels? or (B) Will the economy fall into a deflationary recession that will throw millions more out of work and force mortgage foreclosures on a grand scale, hammering housing prices and unleashing a new equity bear market? The recent run-up in stock prices says stock buyers think there's a good chance of (A). The powerful bond rally says bond buyers think there's a good chance of (B). Either way, it would seem, now isn't the smartest time to buy a house. northerntrust.com
