Our Economy is in trouble, I don't think there is any doubt about that.
Construction jobs have dried up in my area. Of course all that effects around here now is the local population of illegal aliens that work all the non-union construction jobs and most of them are going home to Mexico to find work... (about damn time they went home IMO)
But even if our economy is currently trashed, it is ONLY temporary, as long as we have good leadership to lead us out of the Depression.
Our Country has suffered one great depression already and came out of it stronger than ever before (actually stronger than any country ever in history).
I know we can do it again.
I would love to think that would happen, but............. I truly believe that we have used all of our eggs in the basket. Let em explain.
In the 80's, Ronald Reagen deregulated the banking industry. Great. Deregulation in theory is supposed to promote growth and competition in which it did. We had tremendous growth in the 90's, exuberant growth in stocks related to this etc. Everybody made loads of money.
Fast forward to 9/11. We suffer a terrorist attack, our markets fall, , instead of having 5 major banks like we did in the 80's we have twice that amount, plus all of the boutique banks and investment firms newly created by our policy of the 80's. To the spur the economy, the fed bank lowers interest rates to new levels. Great, it's time to buy new house or use an equity line of credit as it has never been so cheap to do so.
The banks are awash in new business, the real estate side is bringing in more money than it knows what to do with. The thought throughout the industry is we can now begin to package lost cost loans to subprime borrowers, sell them to investment banks on wall street, who will package them and sell them as securities to somebody else. What a great pyramid scheme.The new business will support the old business. Except there is one problem. The new business doesn't have the money to pay their loans and mortgages.
Loans are in default, houses are in foreclosure, banks are sitting with property that can't sell, there are not buyers with enough good credit to bail out the industry that they created.
The banks and investments firms stock are now nearly worthless, everybody is layed off. Inflation is at near depression levels. The government debt has never been so high.
So, who is going to bail out the government?
bailout was defeated by the House today..............hang on folks, it's sure to be a bumpy ride from here..........
