watchdogd

Not just USA, there are economic problems all over the world. As George Santayan said "those who cannot learn from history are condemned to repeat it."

10 years of a down housing market is what Japan went through in the 90's. They had a zero interest rate policy for about 7 of those years and during that time their banks were busy recapitalizing and paring down large amounts of bad debt. Sound familiar to the U.S. bail out ?

And during that time the growth was none to little at best. I suspect the same will be true here. The Federal Reserve was very poor under Greenspan and still has not been responsible, helping create one bubble after another. First it was the Nasdaq in 1999 and then to bail out the falling stock market the Fed made dep rate cuts helping spur the Real Estate bubble.

Many jobs will never return and that will probably result in continued higher than normal unemployment. The charts from the DOW look very simialr to patterns of the 1930 crash. That crash did not fully recover until the mid 1950's. Who knows if it will take that long for the DOW to return to 14,000 but I suspect there is a greater chance of further declines before any substantial growth.

1Sik_s2k

Exact mind set my employer has right now. Bull$hit!

Mini-F1

As an architect, the main problem I see limiting the economy is that the banks are just not lending any money for new projects. Basically the only ones who can qualify are the ones who don't need the credit. Until the banks sort out their business and decide to expand their offerings, it's going to be tough out there. I'm with CBR2200 - I don't think walking away from your house is the answer. I bought within my means, and have a payment I can afford even though my income level is way down. Eating out and other luxury items have been cut way back, and even driving to the local meets has been reined in to save $ on gas. I called my insurance co this week to suggest that this wasn't the right time to raise my rates. They disagreed, of course, so I reduced my coverages.
Obama increasing the size of the government is exactly the wrong solution - go back and look at 1946: The economists all predicted another recession or even depression after the war due to the end of government contracts for war materiels and millions of soldiers coming back from overseas to compete for a limited supply of jobs. The government cut spending by 55% that year and the private sector kicked in and stabilized everything by way of the free market economy. Maybe too much red tape and oversight for that to happen now, but hell, at least stop digging the f'in hole deeper with no proposed way to pay for it... At the very least it sets a poor example for the public, and at worst it will lead us to 20% unemployment like the European countries which are now cutting government like mad in order to balance their books.
SB1070 is a separate topic, but since someone brought it up: 6 million legal residents in Arizona can not be expected to support 6 million illegal immigrants. Period. We pay a huge financial cost in hospital care premiums and property taxes for new schools that aren't technically necessary. That's just two of many issues created by unchecked immigration due to our gov'ts failure to secure our borders.

Nate4635

There is just way too much entitlement mentality out there.

People are driving cars they cant afford, living in houses they cant afford, wearing clothes/shoes/jewlery they bought on a CC. Its caught up with people, and I dont think our economy will get better until people understand that and start living within their means.

No government/president can be responsible for people spending money they dont have. If all these people are really that stupid, then this economy is the consequenses for their actions.

1nate7

I agree. All this overspending was creating jobs and a housing boom but this is what we are left with. Hopefully it has brought back some common sense and things will even out somewhere in the middle. I know people who were quitting good stable jobs to get into real estate or buying multiple houses. It looked like a good idea at the time, glad I didn't get sucked into the hype.

I really do feel for people who are way upside down on a house through no fault of their own, it isn't a fun position to be in.

CypherAZ

I couldn't agree more with Nate. The problem isn't the economy itself, but the people that contribute to said economy.

This one story can sum up anything that I could possibly say.

http://articles.latimes.com/2010/jun/24/lo...asinos-20100624

Tax dollars hard at work!

Personal irresponsibility is 99% of our current economic problem. People making $20k a year have no business buying a $500k house. Blame the banks if you feel like it, but at the end of the day it comes down to people not doing the right thing on an individual level.

9KRDLIN

+1, you can't blame the gun seller if the buyer decides to shoot someone with it. he's just trying to make a buck in a risky business. I am just trying to decide what language i need to learn... I am thinking japanese, but mandarin chinese is starting to seem more like it.

ryoga4523

But you are not looking at the big picture. It was the government that forced lenders to lend to the people who could not, and currently can not, afford to make their payments. The lenders knew this, but the government, both the democrats and republicans (Bush was fiscally liberal), all but forced the lenders, fannie mae and freddie mac for example, to approve loans to lower income residents. You can't blame the child for eating cake for dinner and then getting a stomach ache; you blame the parents for allowing it to happen.

- As a side note- The topic creator is partially correct when he stated that you should not use the media as your basis for knowledge when creating an articulate response to his question. The current main stream media is completely biased to the left. We all know that there is a war going on, right or wrong is irrelevant, but how many times have you seen or heard of a current death toll? I see something on the mainstream media about the war, maybe once or twice a month, and they are typically referring or talking about good things. Why was it that when Bush was in office, they talked about the war almost everyday? Take sb 1070 for instance, looking at the big picture, the bottom line is that the conservative right wants reform, where as the liberal left wants amnesty. Why amnesty? Basically, if you grant citizenship to everyone that is here illegally, that is an automatic vote for your ideological party (not voting party, because the left and right now have severe differences in the way this country should be run, but like someone mentioned before, history is going to being playing reruns shortly. This power struggle between small government vs big government is no different than that of John Adams and Thomas Jefferson). The massive influx of illegals turned legal, would preserve the left to maintain power among a select few, thus creating a minority ruling over a majority. Over the passed 15 or so months, you have seen the hostile government take over of major parts to the private market. Manufacturing, Health Insurance, and as of late, Student Loans. Again, looking at the big picture, the government can pass regulations that claim to be in the name of health. Take the commerce clause for instance, it allows congress to pass laws (statutes, regulations, ordinances, etc...) that can regulate any activity, even intrastate activities, if the activity has a substantial effect, either direct or indirect, on interstate commerce. The government, is slowly opening the door to control your life, as a free citizen of the United States, from what cars you can drive (through the carbon footprint BS; why doesn't china get fined the way other countries do? Hmmm, maybe its because we are in debt billions of dollars...) what we can eat or drink (the ban on salt in New York because of its linked health risks; and the new ban of soda machines on public property in San Francisco). When will the government stop treading on your God given rights? If you do not know what they are, just do a google search of the constitution. Read it, and then ask yourself if the current situation is the "change" that you really wanted. I do not mind having a democratic president, it creates healthy ideological competition, but I do not want to see a group of people trample on the constitution, and force feed the citizens of the United States because they think its "good" for us. And for some of you who believe that the US is utter garbage, or has failed in any way shape or form, slap yourself and be proud of your heritage. We live in the country that has the single best fundamentally sound, living, document known as the constitution. The founding fathers created a document that held the fabric of this society for over 200 years. They knew that we had certain unalienable rights endowed by our Creator, that no man could take away. Don't join the sympathetic left, be proud of being an American. Where you can dream big, and if you work extremely hard, your dreams will come true. That is why we have so many people coming to this land, to this soil, because they believe in what our founding fathers believed in, so why don't we believe in it too?

I know it's long, but it is just my .25 (twenty-five, no it was not a typo) cents...

watchdogd

Yes and no.

It takes two to tango so solely blaming one side or the other is probably not fair. But Unlike the child who gets the stomach ache, the adult is age of consent and should have better judgement.

One could argue that poor education lead people to make irresponsible or bad monetary decisions but thats a different argument

9KRDLIN

I still feel the consumer is responsible.

When my wife and I went to buy a house, we got pre-approved for a $225,000 house. I ran the numbers on it and knew I could only afford a $160,000 house. I looked at my finances and KNEW what I could afford. When we went to build a house, I found the new home builder approved me for $260,000 and asked that I buy one of their bigger and better houses, even though the one we bought was within my budget at $152,000 after everything. Now I as a responsible consumer knew what I could and couldn't afford, regardless of what they told me, because at the end of the day, I know I!!!! I!!! ME!!! I am responsible for making the payments, not them. A salesman will always try to sell you more, because they don't care about you, they care about their checks (most of the time). So tell me how millions of the people that got so called "screwed" walk in to buy a home, that had much higher payments than what they were currently paying, or had a risk of getting much higher payments(i know the ARM's, and they knew what they signed up for, and it was irresponsible cause 1. you don't know, nor can anyone else guarantee what you payments will be, on a house that already stretched your dumbass to the hill, and 2. you bought a home to pay only interest on it. and not like its a little. Interest only was the most you could afford at the time (or damn near it), just wait till you ACTUALLY start paying for it), at what point did the responsible part just shut off completely? please someone explain to me how this would be ok with you, and suddenly its someone elses problem. You knew what you signed. you agreed that was an acceptable price and you would pay the loan back in full, no matter what happened in your life, wether you won the lottery, lost your job, or carried on the exact same way. Same goes for those who re-mortgaged/borrowed a bunch of money against their house because it went up in value...

Thats where the consumer is responsible for me. As for the banks/government... let me start with another analogy (cause i like them)

Would you lend $100 to a crack head, and then really expect him to pay you back? his only income is sucking dicks for crack money, and guess where crack money goes... crack. so why in the world would a lender lend someone more money than they KNOW that person could pay back. They have a really good idea of how much someone can afford for living based on income, and expenses you HAVE to pay, like child support. Most apartment complexes won't rent to you if you don't make more than 3 times the monthly rent, seems a good rule of thumb. At what point did greed switch off the power to your responsibility sector of the brain? I get it, people got greedy. A ton of people are greedy, but they don't go robbing banks to get the $$$. Why are we not holding them and the borrowers responsible??? You're right, we shouldn't press charges for severe lapses of judgement. We should lend them money with a $750,000,000,000.00+ bailout. WHAT THE FOCK???

Don't get me wrong, I love america, but I think some of us should start looking to more realistic and free countries to move to. This is almost a freaking circus sometimes.

Ninja edit: This is just my thoughts on the housing market side. not the grand scheme.