Why did nobody back there, about the time our politicians promulgated the first "housing rescue" bailout package, twig that this was a bottomless pit and that one "rescue" would lead to another?
And another. And another.
And why did no one up there figure out that the money borrowed against our future taxes was not going to accomplish the goal of propping up the inflated housing market, because the only way to prop housing up at prices paid in 2006 was to float more of the bad loans that caused the inflation to begin with?
And why have none of our pols figured out that if we pile on so much government debt that we go into to default on it, that the result will be a collapse so complete and and a depression so deep we need not hope to recover within the lifetime of anyone born before 1970?
It's deeply frightening that none of our politicians, not one, can reason through the hysteria and self-serving arguments of the bank and housing lobbyists, to reach the conclusion that we have already borrowed far beyond our ability to repay, and that adding more unrepayable debt will only prolong the pain.
The loans made to financial houses, completely apart from the $700 Billion rescue plan and all other official interventions, brings the tote for this debacle, to the taxpayers, past $5 trillion and we're nowhere near finished. AIG is now into us for $150 Billion. Many more hundreds of billions will be tossed at banks to help renegotiate home loans in danger of foreclosures.
Expect far more job losses for the next couple of years, and expect the financial sector to shrink by at least 50%. Don't expect to find it any easier to borrow to buy a house or condo, for lenders are reverting to traditional lending standards no matter what. The easy money machine has been dismantled. Do look for prices to drop further as incomes drop in the shrinking economy, and as lenders continue to tighten lending standards to require things like down payments, decent credit scores, and proof of your ability to repay the loan.
Expect higher local taxes with reductions in services as the local tax base shrinks, and less of the money we pay in Federal income taxes is returned to us to help fund our infrastructure repairs and essential services.
I'm not faithful that Obama, much as I like him, will do anything to improve the situation, because his solutions are very much like those deployed so far- when in doubt, throw money at it. I believe that Obama is the best choice that we could have made, but all politicians are financially inept and do not grasp that you don't fight a fire by pouring more fuel on it. The most that Obama is going to be able to do is offer comfort to citizens in their desperate pass, and lay the truth on us in as palatable a form as possible, which is that this country is stone broke, owned by not-quite-friendly countries, and is dependent on enemies for its most essential resource. We also have no manufacturing left, and tossing tens of billions at our failing auto manufacturers is not going to make them competitive in the present time, let alone enable them to develop the transportation technologies we will need to make it throught the decline in oil supplies.
What we're doing with the ongoing and ceaseless cash calls for more "rescue", is throwing all our money and resources at propping up a failing and obsolete financial system whose "wealth" was all debt and that cannot survive as it's set up, or help finance the types of industreis we will need going forward. Debt creation and asset inflation never were the foundations of real wealth and a solid economy.