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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (202548)	5/15/2009 11:02:15 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 306849

>>Our society loaned money to private business and we put everyone back to work doing things our society needed and so by the 1950's both personal and govenrment debt were low. Personal debt went straight down for 18 years from 1932 to 1950.<< so the fact that we had a huge manufacturing base and a world that wanted our goods had little to do with it? we've off shored our manufacturing and the rest of the world doesn't want much of our stuff. we are in trouble - and now we are in trouble with a few trillion in extra debt. >>We had grown out of the GD with lots of government stimulous which funded new businesses and infrastructure.<< a strong manufacturing environment existed and a world that wanted our goods. we produced our way out of the GD. we can't do that now - the world has changed. china might be able to do it, but not the debt slave united states. >>If one takes out a loan to buy and boat and then catches a lot of fish, they make money for temsleves and contribute to society. And if the government makes that loan, eveyone wins as the fisherman pays back the loan----with interest.<< if too many people take loans to catch fish, the market for fish collapses. if you offshore all the fishing, well... back to the point - the banks are acting rational now. my home has dropped $220k in value and their is still no way i would ever pay its current appraisal for the home - and my wife and i do pretty well - about double the average income for the area. the house is above average, but nothing too special. the collapse to rational values is going to continue. i hope you saved money from all the bubble income you should never have received in the first place.

To: koan who wrote (202548)	5/16/2009 3:09:22 AM
From: Elroy Jetson	Read Replies (4) \| Respond to of 306849

The story you tell is simply not true. You can have the opinion of your choice, but you can't have your own set of alternate facts. During the Great Depression, as now, consumer and business debt, relative to income, initially rose as income declined - then this ratio declined quickly due to bankruptcies and foreclosures. (yellow line on chart) The WPA did not pay big salaries allowing debt repayment. The debt was liquidated due to non-payment, just as we are beginning to see today. The WPA-like projects kept people from starving while the economy deleveraged -- that's the entire magic of those programs. They can't prevent deleveraging or bring prosperity. While consumer and business debt declined during the Great Depression, government debt relative to income rose sharply, as shown below, peaking in 1945. Then as the economy grew following WW-II, government debt relative to income declined from 1945 reaching a low in 1981 when Regan was elected. (green line on chart) Reagan sent government debt skyrocketing again from 1981 - along with business and consumer debt, all resulting in the current Greater Economic Depression. Stupidity pays deadly dividends.