I’m not saying the future is all bright and rosy. I just don’t buy into the type of doom and gloom that you have continually espoused here. Are there many economic problems to solve here? Of course. Are they unsolvable? No. Will the solutions be painful? Sure.
Another point I’d like to make.
The unwinding of the housing bubble in selected markets will cause residual damage to the economy. So did the unwinding of the tech/telecom bubble earlier this decade. Just as many software engineers lost their jobs then, many real estate related jobs will also be lost. Please explain why a housing bubble confined to selected markets on the east and west coasts will cause significantly more economic damage than a major stock index losing 75% of its value.
No doubt there will be severe economic distress for those that bit off more than they could chew during this mania. We’ll read about a lot of these people just as we read about daytraders who lost it all as well as the Enron and WorldCom employees who lost all of their retirement savings.
Nationally, I think the damage will be commensurate with the pop of the telecom bubble or the S&L crisis of the early 1990’s. To be sure, these were painful events but fell well short of inducing a critical loss of confidence in the US economy.
Yes, all excesses correct. That doesn’t necessarily translate into economic armaggedon.
