Quote:
Originally Posted by pocketkangaroo
It depends on what your view of "bad" is. Having a guy who makes $13/hour not be able to afford a $300,000 home in the suburbs is not exactly a "bad economy" to me. A bad economy is having half your population lining up in the streets for government bread and cheese. It's having to risk your life to cross a border so you can make $10/hour.
Our housing market has its ups and downs. It's how an economy works. We had many years of great times and a lot of people made a lot of money. We'll have people lose money now for awhile. But housing is still a local thing. You can't judge it by the nation as a whole. There are parts of the country that go up, and parts of the country that go down. People will always need housing, and property will always be a good long term investment.
I don't know what you are trying to say. Do you really think we'll all be broke in a year begging for handouts? We have full employment, a booming stock market, and a fairly high median income. There are very few countries in the world that can say that.
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I hear ya pk! It's not so much that the $13/hour guy can't afford the $300K home - more that those who do have mortgages can't actually afford them overall. (This part is not particularly related to the US - it's the same in the EU right now). You are prob sick to death listening to... wot's his name... Lou Dobbs on the subject of "attacks on the middle class" - it's kinda overlaps into that area.
The home aspect is only one and more related to personal debt building within the country where more is being spent than earned.
The more critical stuff are the constant trade deficits - there have never actually been a surplus since the 1960's.
Another item is the weak dollar while there is a continuation in consuming from other nations - the reality is that is costing US Inc serious money and contributing towards the national deficit. The Central Bank of China is still issuing IOU's at a rate of .. ranging $2-$4 billion daily and building.
Unfortunately, there is prob going to be a further weakening of the dollar this year, - even if that is not specifically related to US economic deficits - tho there will be and just adds to the problem. The Euro, Yen, GBP are all forecast to increase around 5-10% in 2007 based on a natural increase in economic output. The effect of this obviously throws up more differences with the dollar and making it weaker.
Prob one of the most damning elements is US manufacturing ability which represents only 10% of total economic activity. Normally there is a prospect of reducing the trade deficit by increasing exports, but this level of manufacturing ability leaves little leeway for that - and prob can be totally consumed internally leaving nada for exports.
Only my
- there is a serious danger in only looking at elements of any economy and ignoring all others. It's like cherry-picking a balance sheet and ignoring the $20mill bank loans and all creditors. Any sound economy has a surplus somewhere, or, some method of earning "real money" externally (exports). It is very hard to find any major element that shows a positive result in the future and it is one hell of a challenge to swing that around, but sure, it's possible, but not in any short term.