"Kurt Ullman" wrote in message
m...
In article ,
Han wrote:


As far as the deficit spending is concerned, the alternative was to let
everyone, from big banks to small people declare bankruptcy and get
another
Big Depression, or deficit spending. So far, I think, most of us have
gotten the best of it. Punishing the banks would be a good thing going
forward, as well as retroactively, but, again, that is my opinion,
FWIW!!

I might buy that if there had been more than just 3 or 4 years of
non-deficit spending since the time of Nixon. The only time there was an
extended surplus, it was because the economy was so breathtakingly
overheated because of cheap money and growing money supply that money
came in even quicker than both parties could put it out.

I might accept that view if there had not been the creation of an entire new
sector of the economy based on personal computers during the time everyone
was (wrongly) giving *all* the credit to Reagan's tax cuts. PC related
stuff was being made and sold at prodigious rates. There was a bottomless
demand for programmers and support specialists. The problem came afterward,
when (as you've noted previously) people started to budget based on the
super-good times always being super-good. No one thought the party could or
would ever end.

The housing bubble, on the other hand, created no new real estate, it just
horribly overvalued the existing supply. The wealth created by the PC
revolution was real. The alleged wealth created by an overheated real
estate market feeding into a voracious securitization machine that put too
much distance between borrower and lender was *not* real. It was a spec
bubble. One that various government policies of both Bush and Obama is
keeping alive far longer than is good for the country. The real estate
market needs to coalesce before people feel comfortable selling their houses
to move elsewhere for better job opportunities.

Also, a big reason that this was so bad was because EVERYBODY from
the corporations to individuals and even (finally) the gov was broke.

It takes a lot to break all three groups. People walking away with $1B in
"profit" when no wealth was created was an awfully good start on making
everyone *outside* of Wall St. suffer for their sins. Instead of creating a
bigger pie for everyone the way the PC revolution did, they just took larger
and larges slices for themselves.

Using taxpayer money to gift AIG employees with outrageous bonuses should
have been the last straw. They whined and bitched, too, forgetting quite
quickly that they would have been OUT OF WORK without government help.
That's gratitude for you.

--
Bobby G.