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

To: neolib who wrote (260662)	7/14/2010 10:50:42 AM
From: Smiling Bob	Read Replies (1) \| Respond to of 306849

If the borrowing is to fund living beyond your means ala the HELOC ATM mindset of "home owners" of recent years, thats not so good --- Describes a large part of publicly traded companies throughout history and why the mkt is mostly nothing but a license to fleece by creating their own currency/money tree/atm in the form of stock certs.

To: neolib who wrote (260662)	7/14/2010 11:51:10 AM
From: RetiredNow	Respond to of 306849

The reason why the logic I described does NOT apply to private enterprises is that private enterprises will generally invest in new income streams that have a return on investment. US private enterprises are exceedingly good at doing this. However, our government doesn't generally spend excess borrowings on things with a return on investment. Instead, it spends on welfare and bailouts and cash for clunkers and housing credits and all sorts of other things that cover up pain today, while making the future more painful, because not only do we have to pay back the loans from China, but we have to pay interest on it as well. So that is why government borrowing to increase GDP today is not considered sustainable. Our government just is not very good at investing that money in new income streams. In fact, their track record of investing in things with a good return is exceedingly poor. So the theme running through my previous post is dead on accurate.