Where did all this money from unsecured debt go? In to personal consumption, everybody’s higher standard of living, beyond their real means. We created an overheated economy.
Did the bankers and money changers get richer? Of course they did, since every financial transaction has an inherent cost. Did the politicians prosper? Of course, they had more tax revenue than ever to spend.
When the bubble burst, as it had to because it was formed by irrational expectations on the worth of property and education and personal potential, our national reaction was disbelief. In the past four years, we’ve had stimulus spending which was really a poor attempt to maintain the status quo, and pie in the sky investment in technology and green industry that doesn’t have a prayer of near term economic success.
We cannot recover to a false economy like we had. We can recover to a rational economy where everybody is involved in meaningful work and prudent expenditure. Since our national debt has grown enormously, everybody (not just 53%) will have to participate in debt reduction too.
Our first step is to change out the lack of leadership in Washington, D.C. More of the same can only make us much worse off.
