Apparently people did not learn from the Great Recession... They are out borrowing and living large again. It is hard for me to feel bad when the rainy day comes and all these folks have no umbrella. Oh well.
CNN Money Debt Growing
It is really too bad that Bush and Obama drove up the National Debt to buy our way out of the Great Recession so quickly... It seems people did not have time to learn valuable lessons, and now our country is deeply in debt if the economy flounders again. Which it will undoubtedly.
G2A Recession a Bad Thing?
G2A Recession a Bad Thing Revisited?
CNN Money Debt Growing
It is really too bad that Bush and Obama drove up the National Debt to buy our way out of the Great Recession so quickly... It seems people did not have time to learn valuable lessons, and now our country is deeply in debt if the economy flounders again. Which it will undoubtedly.
G2A Recession a Bad Thing?
G2A Recession a Bad Thing Revisited?
6 comments:
Economic crises are cyclical, and part of the cycle is the forgetting of the lessons of the last crisis. Back in the day, it took a couple of generations. We couldn't have had the financial disasters of the 2000's until the lessons of the depression were forgotten. These days, the process is accelerated, it seems.
One of the more unnoticed ironies of the new administration is that no one seems to have noticed that we have elected as president, a bankrupt who defaulted on debts on a scale simply incomprehensible to any normal human being. And virtually his first order of business was to repeal measures which he complained, made it more difficult for he and his friends (all of whom managed to avoid prison somehow despite their role in America's financial crisis) to borrow. That no one in the room burst out in hysterical laughter was the surest proof ever that amnesia has set in, and that the early stages next financial crisis are well under way. That, and the fact that people are spending too much at Target.
--Hiram
For me as always, there is much to be learned from my favorite video on economics, "Wait and See". https://www.youtube.com/watch?v=2tw688Kbjy4 That video was made during the recession when business was afraid to invest because the future was uncertain. Now given the fact that the future is always uncertain, it follows that there is never a good time to invest. But the investment climate depends, on facts, but on how the facts are perceived. If you listen to the boss, none of the issues she raises for not investing have gone away. The population is still aging, health care costs will continue to rise. Children still need to be educated, and teachers, even charter school teachers, will still demand to be paid before rendering their services.
No, what changes is the attitude toward underlying realities, what the manager sees as her priorities. If she perceives that the economy is expanding, she is going to borrow more, take greater risks, take on more debt. And it may work, if she invests soundly and well.
--Hiram
Hiram,
Such drama... We have a recession about every 8 to 10 years... And my personal opinion is that the 2008 was worse than normal because Bush minimized the 2001 recession by passing that ton of tax cuts. That allowed a lot of people to forget that what goes up does come down... So they just kept mortgaging themselves as the market kept going up. It was like printing money for the home owners. Buy a house for $200K and soon it would be worth $300K.
So the Great Recession should still be fresh in the minds of Americans, and yet they are out there again taking trips, buying houses, buying the little luxuries and ringing up their debt load. Thank God for the foolishness of American consumers.
Wait and See Video
As for "none of the issues she raises for not investing have gone away." Actually they may have...
See in the video the boss saw the Government and Democrats as kicking her around or threatening to kick her around, which she did not like.
Whereas today the Bosses and Investors have hope that the GOP will reduce the beatings that the Businesses and Investors have been receiving.
And that citizens will be asked to take more responsibility for the choices they have made in the past, and less of their natural consequences will be transferred on to society in the form of higher taxes.
We have a recession about every 8 to 10 years..
We hadn't had extensive bank failures since the 1930's. And that's the last depression we had. Because of the responses to the Great Depression we had shifted to an economy that would have minor recessions of short duration.
See in the video the boss saw the Government and Democrats as kicking her around or threatening to kick her around, which she did not like.
You notice she was making business decisions for personal reasons. But the fact is, the underlying reasons why economies struggle to perform are always there. We have health care that needs to be paid for, pensioners who need to be paid back the money they loaned it during their working years. Debts that we were happy to incur when we wanted to buy stuff need to be paid back.
When people get optimistic, they are willing to take on risks which means they are willing to borrow more. The reasons for not borrowing don't go away, but they recede in importance. But they don't go away.
"And that citizens will be asked to take more responsibility for the choices they have made in the past, and less of their natural consequences will be transferred on to society in the form of higher taxes."
The responsibility doesn't change. When Trump declared bankruptcy, he simply shifted the responsibility for his debts to his lenders and taxpayers. But it didn't go away. Things like roads and bridges, health care, the national defense, don't go away. They must be paid for somehow.
--Hiram
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