reply to post by jetxnet
I dont want to answer for him but I think bigunits point is that we are growing technically but its is because our debt hides the real numbers. If I
had $10,000 in credit card debt and pay only the minimum payment each month, I could still save money and tell myself I'm doing fine because, I have
savings and I'm still able to buy food and clothes and other products that give the impression that I'm experiencing economic growth. But this is
lying to myself. I would still be sitting on $10,000 in debt. If this debt is unsecured(meaning I do not have the assets to cover it)and I was forced
to pay the debt I owe all at once, I wouldnt be able to pay it and would probably have to file for bankruptcy.
While the OP may be right that technically by the definition of a recession, we are not currently in one. Its only because our economy is being
propped up by debt and the printing of money. But to claim that there are no problems in the economy right now and that it is a conspiracy created by
the left is very naive. You cannot deny the inbalance in the trade deficit, the huge state and federal debt, the outsourcing of large numbers of
jobs, enormous amounts of consumer debt, declining wages, outrages energy costs, a burst housing bubble, more corporate bailouts in the last 8 years
than in the previous 40years, the list goes on. There are big problems that are going to result in hardships for everyone in one way or another.
This housing crisis is essentially the same thing. Person buys a house for $200,000 with a variable interest. For the first 5 years they pay their
payments and are able to save a little and buy food and clothes and cars, etc. But when their interest rate increases, they find themselves unable to
save as much each month, then at some point they cant save anything and now they are having problems paying bills. So at some point they cant pay
their bills because their mortgage payment has gone up so much and the increased cost of fuel and other goods. So they decide to sell their home, but
they are not the only ones in this situation, so when they attempt to sell their home, they are unable because the current market is flooded with
houses. So in order to sell it they have to drop the price below what they owe. Now they are in a position where there debt has outpaced their assets
and they are bankrupt.
At no point was this fictional person experiencing economic growth. As long as you have debt, you are not growing economically. It may appear that
way but its not true. That is why banks will use debt/income ratio for evaluation. This is a more accurate calculation of someones economic status.
I can make $1,000,000 a year but if I have $50,000,000 in debt, I am not growing economically.
Not everyone is yet experiencing hardships from this economy but many are. They are in a cycle of debt and it is happening much more than people
realize. I know some of these people. I'm not saying they are not at fault but people do desperate things when they are in desperate situations.
Paying off credit cards with another credit card, paying off debt with a second mortgage on a home that has now lost 20% of its value in 3 years.
The debt is hiding the true economic health of the economy and if you are going to ignore the debt and just look and growth, you are lying to
yourself.
