DesideriScuri -> RE: FYI : Real data about tax rates. (9/25/2012 8:46:50 AM)
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ORIGINAL: Arturas quote:
Then economy depended on refinancing and cashing out your home equity. My economy did not depend on refinancing and cashing out my home equity. Neither did my neighbors, all of them. My home is secure. I have equity. The economy never depended on refinancing and cashing out unless you define the economy as driven by those who could not aford a home buying a home nonetheless and then pretending it was an ATM year after year for a few years. The point is, the economy then and now would have been overall better, "better" defined as steady growth and stability, if nobody bought homes they could not afford and nobody then used them for ATMs. So, that bubble was not "an economy", it was a bubble like the stock market in the crash of 1929 and the economy suffered from the bubble but was not defined by the bubble. Actually, Arturas, MrRodgers is correct here. He isn't talking about your economy, or your neighbors' economies. He's talking about the overall US economy, which did (and still does) rely on debt supported spending from private citizens. I call it American Consumerism, and it's the scourge of the US social everything. People, as a generality, but not guaranteed to apply to each individual, have a propensity to consume and to consume as much, more than, and/or as high a quality, as their neighbors, or others they are socially linked to. That can lead to incredible debt problems if your income doesn't limit your spending. If you aren't over your head in debt, losing your job isn't near as cataclysmic as if you are in debt up to your eyeballs. People were buying without currently having means to pay, speculating that their means were going to improve, or that they could hang in long enough to realize a large appreciation. The company I worked for at the time was a supplier of "stuff." Businesses, government entities, and private citizens were our customers. The company got hit hard when things went south at the end of 2008. Jan thru Oct of '08, the company was running at 8% annual growth over '07. The company I worked for had a hoard of cash they were sitting on, and carried zero long-term debt. Short-term debt was there, but it was one of those things where it was paid off by the time the invoice was due. That did help the company weather the downturn very well, better than some of their competitors who were not as financially solid.
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