OT: more economic smoke from the US economy

I find a few things disturbing. Borrowing against one's home to pay credit card bills. When they put you out to pasture, SS pays for food, light and heat and maybe your health maintenance drugs. It will not pay the rent. You were supposed to have that part covered by then.

Then there are those that borrow against their 401K's. That was supposed to deal with everything else that comes along that you need to deal with. Failed water wells, house needing a re-roofing, car payments since you outlived the old one, property taxes, ect.

There are a lot of people that are going to be in serious hurt when they get too old to work. A lot of them I feel absolutely no sympath for since they will be getting what they deserve.

If you can't afford your lifestyle while being in your prime, you are screwed when you are at retirement age.

I have a plan on track for enjoying my retirement, I just hope I live long enough to excercise it. That is always the rub. If you die at 55 then those that didn't save for tomorrow won. ;)

Wes

All I can say is that this is what you get when you put a totally incompetent boob in the White House. The one thing that Bush was able to say he's not screwed up completely is the economy; with the US having a decent record over the last few years. He bragged about how well the tax cuts and deregulation helped the economy, and for a while it did okay. Now the chickens are coming home to roost and like everything a president does it takes time for the results of his decisions to show up. By every measure the economy now stinks and Bush can do nothing about it. Eight years of letting business run the country and look what you get. Housing, mortgages, manufacturing, you name it and it's doing poorly. The stock market was also down over 200 points today too. Yep, put a boob in charge and this is what you get. The scary thing is that the same people who voted for Bush, twice, now would like to have another republican in charge who will do things almost exactly the same as Bush has. Electing another republican after Bush would be incredibly stupid. No wonder that is exactly what republicans want to do.

Hawke

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I think this issue bears a closer look, if anyone is interested enough. I just looked through the current Federal Reserve tables from which this press announcement was constructed, and the *rate* of household mortgage debt growth is the lowest it's been in decades, except for one quarter in 1997 and another in 1995.

In other words, it doesn't look like people are piling up mortgage debt -- just the opposite, in fact. But the collapse of the housing bubble has cut deep into equity.

Just for the heck of it, I looked at 2003, and I see that the equity/debt ratio that year was 46%. That was before the housing bubble collapse. So an increase in the ratio of debt to equity is an expected corollary of the decline in housing values rather than accumulating debt and it's not particularly dramatic. It's certainly upleasant but not unexpected. The press seems to have gone for a little extra drama.

If you want to check it out for yourself, and to look further into the historical tables, they're available here:

You'll want to look at the debt outstanding and balance sheet tables. Take a look, too, at the debt growth tables.

-- Ed Huntress

And the selective fallacy. With so many economic statistics, there's always some that are the most-ever or least-ever lately and "alarming".

Rather like if you take enough surveys on a given topic, you'll eventually find isolated results that appear to agree with your point of view.