Friday, July 11, 2008

The damage is already done

The headlines in the papers make it seems as if the sky is falling. It isn't. The sky fell from ~2000-2008 when homeprices shot up 300% in the US, making them unaffordable, having consumers take on enormous loans they could not afford, and reallocating resources from useful things to building tracts of crappy housing no one wants, in crappy areas no one wants to live in.

The question now is: "who bears the losses"? Many people are rooting to put it on the taxpayer and saver, and if the US does experience another lost decade (or longer) it will be because everyone's playing musical chairs and the government refuses to turn the music off. So instead of getting back to, you know, doing useful things we dance in circles.


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