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Spread this message with Digg, Del.icio.us, Reddit, or Stumbleupon, and subscribe to the RSS Feed to track articles Our housing market and whole economy is sitting on a house of cardsE-mail - editor@economyincisis.org |
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It is pretty obvious that the housing market is in the throes of pulling back and some even say collapsing. If it is not handled properly, the housing collapse could result in another Great Depression. America no longer has the (manufacturing) capacity to work its way out of a deep recession. While the Fed was sluicing $11 trillion into the real estate market via low interest loans; America’s manufacturing sector was being carted off to China and India in the name of globalization. Without capital investment and increased factory production, economic recovery will be difficult if not impossible. The so-called “rebound” from the 2001 recession was due to artificially low interest rates and easy credit which inflated the housing market. It had nothing to do with the increases in productivity, exports, or paying off old debts. In other words, the “recovery” was not real wealth creation but simply credit expansion. There’s a vast chasm between “productivity” and “consumption” although Greenspan never seemed to grasp the difference. A penny borrowed is the not same as a penny earned although both may cause the same bump in GDP. Greenspan’s attitude was aptly summarized by The Daily Reckoning’s Addison Wiggin who said, “Government GDP figures measure debt-fueled-consumption—when in reality it truly measures the rate at which American is going broke”. Much of the above article is taken from an article by Robert Shiller
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Article Comments From Readers
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guest says "The Rich are creating the next Depression" on 05/20/07
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guest says "another depression" on 05/17/07
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back in l953 milton friedman predicted that there would not be another depression provided that the federal reserve would not let the money supply drop by one-third as it did betweeen l929 and l932. In l998, 45 years later Dr. Friedman was interviewed by Peter Brimelow for
forbes Magazine. brimelow asked Friedman whether he still believed that there would not be another depression. Friedman answered that he was right for the past 45 years so why should he change his mind now? We can now make that 54 years in which the feds did not let the money supply drop by one-third and still no depression. |
Friedman is one of the same group of unpatriotic Global economists without conscience who never minded selling out America to increase wage inequality.
His supply side economics do give quick gains in the short time at the cost of long term security and integrity. GM did something similar when it decided not to galvanize the steel in their cars to save a quick buck for the bean counters. Where are they now? We will soon pay a very high price to cover the "Friedman Bargain" when our debt is recalled.
The best thing that the U.S. Treasury should to avoid a depression are the following:
1: Create a $1 Million Dollar Maximum Wage. This is a very gernerous proposal. Anyone who earns more than this amount is cheating the system and taking more then their fair share of revenue.
2:Nationalize the oil companies who are extracting billions from US taxpayers only to park the money tax-free in the Cayman Islands and cheat the system and all Americans.
3:Replace the minimim wage with a Living Wage ($25 per hour) for legal Americans. 4:Deport all illegal workers who are undercutting American workers, defunding our country by wiring back money to Mexico, and not paying their fair share in taxes.
5:Return to the gold and silver standards. Trust standards are only worthwhile if a government has and maintains integrity. The public trust in the US government continues to drop and as it does the value of the dollar continues to fall.That's why smart investors are dumping their stocks and going to metals. The collapse appears from likely to imminent to them, but they can never say that publicly.
Under Bush, our dollar has already lost at least 35% in value compared to the Euro.
The economic elites are blinded by their power and wealth and now make the same mistake as the monarchies of Europe and Russia did in our history.
The public will soon wake-up and make it clear that infinitie trampling of workers, slave wages, illegals bucking the system, corporate tax havens, and obscene salaries are intolerable.
Those who have cheated the people (Jeff Skilling, Ken Lay, Michael Milken, Leona Helmsley, Dick Cheney, Lee Raymond,Dick Grasso, Dennis Koslowski and others)must have their entire wealth seized and be held accountable for their great crimes against America and its citizens.
If they escape punishment and continue robbing and exploiting America, there will be a depression and a revolution.