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The Subprime Crisis Is of Epic Scale

Published 10/29/07 Jim Baird - Print Article
E-mail - editor@economyincisis.org

From a recent AP article updating the latest statistics from the subprime meltdown:

“The Connecticut Post reports that foreclosures have jumped 547 percent in the New Haven-Milford area, 522 percent in the Bridgeport-Norwalk-Stamford region and 446 percent in the Hartford area.”

The article continues,

“Nationwide, it is estimated that 19 percent of subprime loans made in 2005 and 2006 will lead to foreclosure and nearly two million families will lose their homes.”

Two million Americans will lose their homes. To put that number in perspective, 2 million is bigger then the populations of Boston, Seattle and Denver combined.

Only time will tell the exact number of Americans that lose their homes. Either way, we should all be outraged at the predatory loans and stagnating middle-class wages that created a crisis of this magnitude.

Read the orginal AP article at, http://www.wtnh.com/Global/story.asp?S=7276858&nav=menu29_2


Jim Baird is the managing editor at EconomyInCrisis.org. He is a journalist and commentator. Mr. Baird studied in the Honors Politics program at the University of Edinburgh and is a graduate of The Ohio State University where he studied political science and journalism.

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Unless the above article is already copyrighted, this article is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License, EIC grants permission to use this article in whole or in part provided attribution is given, preferably in the form of a link back to EconomyInCrisis.org.

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Article Comments From Readers

guest says "Blame the Victim, Bail out the abusers" on 11/04/07
The victim here is the borrower. They were sold a bad bill of goods without the requisite knowlege or full disclosure or transparency that should ALWAYS be mandated by law by mortgage companies.

The govenment should Nationalize all home sales and provide a uniform rate of (3%-4%) on all primary homes in the interst of fairness and increased home ownership.
Once again, we see the failures and abuses of Capitalism punishing the poor and rewarding the greedy.
Its time to try economic socialism to serve the public interest.

guest says "It's not just the buyers" on 11/03/07
As satisfying as it may be to some to say that the homebuyers of subprime loans deserve what they get and should suffer, there is going to be a LOT more suffering than just those who have to abandon their homes. Talk to the Bear Stearns hedge fund investors. Even further than that, this subprime fiasco is a long way from over. This recession will take a toll on a lot of people who took no part in the bubble. You may turn out to be one of them.

guest says "The hippies were right after all" on 10/30/07
Thanks to almost 40 years of Conservative mismanagement of our nation, we are now seeing the meltdown of our country with a falling dollar, outsourced industry, unprecedented corporate greed and corruption, an ongoing war of discretion and now a housing debacle.

The hippies were right after all. Leaving Conservatives in charge of the nation ruins it through war, corruption and incompetence.

guest says "Standard of living" on 10/30/07
The per Capita income of a Male in the USA is $30,000 per year or $20,000 after taxes.
The average Per Capita Income for a Female worker is $20,000(before taxes)

Why do so many people think we are living the life of Kings and Queens?

Houses cost $300,000
College Tuition:$30,000 or more per year!
Healthcare costs increase at double digit rates!
25% of Americans do not even take a vacation and most of the rest take 1 week per year.
Do you think the folks pulling in $15,000-$20,000 per year are the ones buying the houses, cars,etc?
Of course not!

Much of the Wealth that is being spent in this country has been inherited from past Generations.

About 25 % of the American population is Middle Class or above, the rest I would consider Working Class or Poor.

75% of Americans have been hammered and some of the Top 25% only have their standards because their Parents and GrandParents gave them their wealth.

The Nice Houses, Cars,etc are being bought by these top 25% of Americans, much of which is past wealth.
Our Economy for many Americans is Terrible and getting worse.

guest says "Paying to much" on 10/30/07
As a review appraiser for a major mortgage company. I would cut values on purchases that were not worth what they were selling for. The Realtor, Mortgage Broker and Purchaser/Borrower would scream and threaten to sue us. with the Purchaser/borrower screaming the loudest. I would require the Purchaser/Borrower to sign a acknowledgement at closing stating they understood they were over paying for the property. And they would still purchase the over priced property. It was insane!!!

guest says "The American Way" on 10/30/07
This problem is nothing more than a result of the over spending menatality in America. No one worries about the future only can I qualify and what is the monthly payment today. This is a generational problem, there is no longer fiscal responsibility in america any longer. We should stop blaming the Lenders, the Brokers and the Banks. If banks chose to make bad loans that is there problem if individuals chose to accept bad loans that is there problem. People need to take responsibility for there choices. When the dot com bubble burst we didn't blame the venture capitalist or the emerging companies we thought how stupid were these individuals to think this was going to keep going based on no fundamentals. When this all washes out it will serve as a wake-up call and learning expereince for this generation. You can't have everything, you don't need an escalade a plasma TV, private school, 400 pairs of shoes, fancy dinners every night and by all means a house you can neither afford or need.

guest says "It's A Privilidge Not A Right." on 10/30/07
Since when did owning a home become an American right and not a privilidge? Once again we are dealing with a situation that the people that tooks these loans out want to play the victim card and want to blame everyone but the person in the mirror! I don't think they signed their loan papers with a gun to their head? So for once why don't we start holding Americans accountable for their actions instead of letting them deal out a victim card?

guest says "epic foreclosures" on 10/29/07
these people had to know they would not be able to afford a house more than 1/2 of a lifetime salary of say 1,000,000 over a 40 year period. Did these people really think they would be able to get 600,000 for a 40 year old, not updated, 1200 square foot house forever and the value would go up to 1 million (remember it would take 40 years to make a million) were they really that dumb. I guess so. A little research and common sense would have kept them from this fate so why blame the messenger: preditors, one word could have prevented alot of the agony these people are facing. NO. These people wanted what they wanted at all cost included and now they cry foul. They weren't crying foul when the banks let them have 500,000 houses with McDonald jobs, they thought it was too good to be true and unfortunately it was. This is a lesson that will be in the history books and lets hope it is never repeated again.