I'm thinking Stimulus II, and then Stimulus III...each more stimulating than the last. Yesterday we sold cars for clunkers and just tomorrow we'll have some sort of stimulati regarding energy smart appliances. Then what?
What will it take to get women out of their housal units and blow another $800 on the credit card at Macy's, Neiman Marcus and Lord & Taylor? Come on! We need you!
What will it take? Well, perhaps if we had just a 10% rise in housal unit values we'd get another 1% bump in consumer spending, just like we used to routinely do in this great country, during the boom years, where hallucinated housal prices created a fake wealth effect.
There's a couple we've recently became acquainted with who bought their housal unit maybe fifteen/twenty years ago and today owe 2.1 times more on it than the day the bought it. 2.1 times. I don't think they leveraged that cashed-out hallucinated wealth to buy equities or invest in other productive endeavors. I'm pretty sure they were just like Alecia Silverstone above, happily blowing all those surplus dollars on consumables, happily assuming that they'd just re-fi again when rates dropped or when their unit value rose another 20%.
We were a nation of clueless dolts in 2003-2006, happily cheering on two wars we didn't give a shit about, building ten years worth of commercial and residential property in the span of three, and enjoyed lifestyles hinged upon a negative savings rate (i.e., borrowing from today) and an exploding national deficit. I think we deserved every bit of this recession, and I hope to see it get worse for a very long time, so that perhaps we'll have a whole new generation of people who won't follow their parent's ethos of something for nothing. Although I don't believe it, if we are emerging from recession today then we will have learned nothing, because we'll get back on that same turnip truck, motor down the same road, and we'll be off to our next fiscal crisis.
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There's a couple we've recently became acquainted with who bought their housal unit maybe fifteen/twenty years ago and today owe 2.1 times more on it than the day the bought it. 2.1 times.
-- In a word, pathetic.
Perhaps cashing-out to send your kids to college...or to pay off a medical bill. These are productive endeavors, yes, to keep yourself employed or to develop the potential of others.
But realistically, most people who owe more today did so because they wanted the Yukon, the Lexus, the new windows and the hardwood floors. I look out my computer room window this morning and see this very thing.
I don't specifically know why any given person owes more on their mortgage fifteen years later, but collectively it's pretty clear.
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