Two images that explain the entire problem with our economy...

[AnnArborGator]

...and why it's not getting better anytime soon...




http://www.financialarmageddon.com/2...ng-divide.html

Oh and the best part? The debt represented in the charts doesn't include financial sector debt (in order to avoid any accusations of double-counting).

Can't wait for the government apologists to explain how the government creating more debt that we can't afford to pay back is helping the situation.

[AnnArborGator]

The best line I've read today on the economy: "a strong recovery is not necessarily bullish". IOW, we need the recession/depression to destroy more debt and cleanse the system more before we begin to grow in a robust manner again in order to be safely sustainable.

hat tip Ed Harrison on the quote: http://www.nakedcapitalism.com/2009/...ing-redux.html

[rivergator]

Does that debt per person include home mortgage?

[alagator]

Originally Posted by AnnArborGator

The best line I've read today on the economy: "a strong recovery is not necessarily bullish". IOW, we need the recession/depression to destroy more debt and cleanse the system more before we begin to grow in a robust manner again in order to be safely sustainable.

hat tip Ed Harrison on the quote: http://www.nakedcapitalism.com/2009/...ing-redux.html

It will soon become a reality that the USG will have to repudiate some of its debt. The carrying cost of the total amount will become untenable.

Look for a date in the not too distant future where the USG will announce that all debt held by non-US citizens will be in immediate default.

Three certain things will result.

First, the USG credit rating will crash.

Second, US citizens (and possibly registered corporations) will immediately go into the international debt markets to purchase at a huge discount the debt held by foreign entities in an effort to convert the debt to domestic holdings. And great consternation brewing in Washington DC trying to find a way out of honoring this converted debt.

Third, the USG will have to operate on a near cash basis as it will be virtually impossible to issue any additional debt for quite some time.

[Dreamliner]

Thanks, Americans.

[philnotfil]

Originally Posted by AnnArborGator

...and why it's not getting better anytime soon...


Oh and the best part? The debt represented in the charts doesn't include financial sector debt (in order to avoid any accusations of double-counting).

Can't wait for the government apologists to explain how the government creating more debt that we can't afford to pay back is helping the situation.

For some reason people forgot that credit is debt. Hopefully we can have the same reaction that our grandparents had to the Great Depression and do and live within our means from now on. Our children will remember our attitude towards debt and stay out of debt, but our grandkids and great-grandkids won't remember and will do the same things that we have done with credit and repeat the cycle.

Of course, we could miss the financial lesson of all of this and keep living on credit and our grandkids won't have to worry about financial planning.

[endabcs]

filnotphil, how is it that you have a black box for rep?

[philnotfil]

I didn't like the idea of having rep bars when they brought them out, so I had the mods turn it off for me.

[dangolegators]

Originally Posted by philnotfil

I didn't like the idea of having rep bars when they brought them out, so I had the mods turn it off for me.

I'll have to look into that as well. I've never liked the whole rep thing.

[QGator2414]

Originally Posted by rivergator

Does that debt per person include home mortgage?

Why does it matter if the debt per person includes a person's home mortgage? People buying homes they cannot afford is the root of the problems we have! If they did not take a mortgage they could not pay their would be no mortgage to package into bad paper by Wall Streeters who have the government there to bail them out while small business sits and gets nailed due to bad decisions.

[rivergator]

Originally Posted by QGator2414

Why does it matter if the debt per person includes a person's home mortgage? People buying homes they cannot afford is the root of the problems we have! If they did not take a mortgage they could not pay their would be no mortgage to package into bad paper by Wall Streeters who have the government there to bail them out while small business sits and gets nailed due to bad decisions.

Don't you think that carrying a $100,000 mortgage is pretty different than having $100,000 in credit card debt? Especially since, for most people, the alternative to not having a mortgage is paying rent.

[endabcs]

Originally Posted by QGator2414

Why does it matter if the debt per person includes a person's home mortgage? People buying homes they cannot afford is the root of the problems we have! If they did not take a mortgage they could not pay their would be no mortgage to package into bad paper by Wall Streeters who have the government there to bail them out while small business sits and gets nailed due to bad decisions.

I disagree, lending money to under qualified people that can't afford to pay it back is the root of the problem, and a really, really stupid business model.

[QGator2414]

Originally Posted by endabcs

I disagree, lending money to under qualified people that can't afford to pay it back is the root of the problem, and a really, really stupid business model.

Hence why we should have allowed the companies who did so to go bankrupt!

Although the CRA is a perfect example of the federal government hampering the private sector creating the scenario you are speaking of. It is still no excuse for bailing the companies out!

[endabcs]

Originally Posted by QGator2414

Hence why we should have allowed the companies who did so to go bankrupt!

Although the CRA is a perfect example of the federal government hampering the private sector creating the scenario you are speaking of. It is still no excuse for bailing the companies out!

I'm in perfect agreement, and same goes for the people who made poor personal business decisions.

[philnotfil]

Originally Posted by QGator2414

Hence why we should have allowed the companies who did so to go bankrupt!

Yes. Sometimes you have to take your medicine. This was one of those times. Not taking our medicine just means that it is going to be worse when the house of cards really collapses.

[QGator2414]

Originally Posted by philnotfil

Yes. Sometimes you have to take your medicine. This was one of those times. Not taking our medicine just means that it is going to be worse when the house of cards really collapses.

Completely agree. We tried to patch a tire that was beyond repairable. Now we a complete mess thanks to Bush and Obama!

[endabcs]

Originally Posted by QGator2414

Completely agree. We tried to patch a tire that was beyond repairable. Now we a complete mess thanks to Bush and Obama!

and congress

[TR1228]

It's clear as day that the America can't pay back its trillions in debt in un-inflated dollars because we've consumed what we've borrowed. What some think is that the only option would be to simply default, to say we're not capable of paying, and they reason this will never happen. Well, they're right it won't happen, but it's not the only choice. We're going to try to print our way out of our debt, and of course it won't work.

The govt. owes something like 60-70 trillion in unfunded entitlement liabilities (Social Security, Medicare, Medicaid) and now Obama's trying to add another one. What is the govt going to do? Are we going to get rid of these programs in accordance with the Constitution and to save the economy? No way in the current dynamic are the politicians going to cut handouts. Are they going to raise 60 trillion in taxes? The money simply isn't out there; raising taxes cuts overall production and raising them this much will get every hard-working American to leave. No, what they're going to do is print up fresh new dollar bills to hand out; you'll get your SS dollars, but you won't be able to buy anything with them.

[Gatormb]

Originally Posted by philnotfil

Yes. Sometimes you have to take your medicine. This was one of those times. Not taking our medicine just means that it is going to be worse when the house of cards really collapses.

Hundreds have. Those who were bailed (Goldman) sold the securities. Hundreds of wholesalers are gone. Sub-prime is gone. Conventional/FHA have tightened considerably and commercial (the next crash) is non-existant.

[RealGatorFan]

Originally Posted by rivergator

Don't you think that carrying a $100,000 mortgage is pretty different than having $100,000 in credit card debt? Especially since, for most people, the alternative to not having a mortgage is paying rent.

It is different river. You are correct, the mortgage is better but it all depends on the income. For a family of 4 earning $50K, $100K mortgage is not all bad. $100k credit card debt is bad since you never want more than 15% of your total income to go to credit cards. Still, even those who did the right things are slowly getting hit by the depression. Those that lose their jobs might not be able to keep their homes. Those who rent have more flexibility. If I were in my 20s, I'd rent right now and wait until the economy bounces back. I'd save my money and shun all debt. I wouldn't necessarily opt in 401K unless I had company matching and even then it would be to the extent of the matching. I'd save as much money as I could and then buy property, especially commercial property. Commercial property across the nation has already dropped 39% and is set to drop in value to more than 50%. So a property that cost $1,000,000 in 2007, now costs roughly $610,000 and will eventually drop to less than $500,000. That's a nice investment since than $500,000 could buy you 10,000 sqft which generates $70K to $140K in income.