But now the chickens are coming home to roost. When has debt ever been a good thing? Of course it's easy to control when it's manageable, but will all things, when greed takes over a crash is hard to avoid.
Cranberry Twp, PA (PRWEB) March 3, 2008
First it was the impending housing bubble. Journalists, bloggers, economists and a host of other "housing party watchers" were sounding the alarm as early as 2003. No one listened. Then came the subprime crisis. The same thing happened.
Now this problem has spread like a 20-car pile up on America's economic highway, and it's threatening to jump the median into the global economy. America's economic wreck is long overdue, according to Wreckonomics, a blog dedicated to "rubbernecking the wreck" that is American capitalism, according to its author, Chris Klein. (http://wreconomics.blogspot.com)
"We've been told for years that leverage is a good thing," says Klein. "But now the chickens are coming home to roost. When has debt ever been a good thing? Of course it's easy to control when it's manageable, but will all things, when greed takes over a crash is hard to avoid."
Klein has spent nearly 20 years in the housing and mortgage industry and has seen first hand the expansion of credit and the explosion of housing prices. "Most of us in the business knew that this was coming. First, you had homes that were appreciating well beyond what was conventionally know as reasonable, and then you had mortgage companies issuing 100 percent loans to people who had hardly paid a bill on time in their lives. Many had thousands of dollars of outstanding collection items. Then it got really insane ... they stopped asking you to prove your ability to repay. It was like handing a blind man a million bucks and sitting him down at a black jack table. He may win once in a while, but over time you just know he's gonna lose it all."
Klein started Wreckonomics as a "way to simplify the myriad of complicated financial news and proposals and put into layman's terms" what is actually occurring.
"We have become a society where what he have is who we are. The big problem with this is that we are taught this from the time we are children, and then it is reinforced through the media and even by our government. Times are tough, and what does the Federal Government do? They give us a little money and actually tell us to go spend it. They did it after 9/11 and they're doing it now. We have the lowest savings rate in the civilized world. It's even dipped into negative territory. Our own government is trillions of dollars in debt to foreign interests. There seems to be no way out but a painful one. This is Wreckonomics at its finest."
Klein combines blunt, easily read opinionated verse with informative statistics and information. It's hard not to "rubberneck the wreck" once you've read the work.
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