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Old 07-13-2008, 09:51 PM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 21,874,189 times
Reputation: 3587

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Recessions are GREAT for the country! Why are they great? Simply put- RECESSIONS are what prevents DEPRESSIONS. Every capital intensive economy is much like a locomotive- it begins moving very slowly and keeps picking up speed until the brakes are applied. It is better and easier to apply the brakes and slow it down than to jam them on and stop it completely. And if you just keep letting the train roll faster and faster eventually it is going to crash (aka hyperinflation).
When a capitalist economy is growing, it produces excesses. Some of the excesses are from speculators (aka investors) that just get stupid to the point they are throwing tons of money into things that will any realistic person would know will have to come back to Earth sooner or later. Recessions are what cleans those excesses out of the economy much like getting a cold (recession) as opposed to getting cancer (depression).
Good examples of excess were the dot.com boom in the 90s. You had folks that would bid up a dot.com stock to unheard of levels at IPO. Some companies, like broadcast.com, issued IPOs at $12 a share and by the end of the day they were trading at $400 a share! These for companies that had never made a dime of profit and many of whom never did. Eventually it had to come back to reality and thus we had a recession.
Now the same thing happened with real estate. The fact is that, in some markets like Florida and California, housing prices were going up at 25% a year while the wages of the people that were supposed to buy those houses was going up at 4% a year. And those prices were driven largely by smoke and mirror loans that were being given to everybody that applied! No down payment? No problem! Bad credit? No problem! DOn't have a job? Don't need one- just sign here! I mean, what the hell did these people think was going to happen?
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Old 07-13-2008, 09:53 PM
 
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,248 posts, read 21,874,189 times
Reputation: 3587
Quote:
Originally Posted by Mircea View Post
And your evidence is what?

Recession is good for this country. Over the course of the next 10-14 years, the US will permanently lose about 50 million jobs, as in those people will be unemployed for the rest of their life. It'll be like the 1950s and 1960s when there was only one wage earner per family.

But as far as transferring wealth? Not gonna happen.
That won't happen. Companies are hiring now and will be hiring more in the future as baby boomers head to retirement. If anything we face a severe shortage of labour in the future. We will be begging the Mexicans to sneak in and take jobs!
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Old 07-14-2008, 01:00 AM
 
48,509 posts, read 86,072,387 times
Reputation: 18105
The jobs have been changing for about two decades. It is just like we knew that oil was becoming more and more in demand and supplies had peaked. That is why some areas that held on to the same type of employment such as manufacturing are in a recession. Other parts that are not in those industries are booming. That is often why there are such large migrations this country from time to time. People that have done this in the past will do it again with little trouble. Some will just wait to see if the ship sinks.Sad but true.
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Old 07-14-2008, 03:40 AM
 
1,075 posts, read 3,287,691 times
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The housing market makes for a correction, big deal, you have those that climb a tree and have sense enough not to go way out on a limb, others choose to see just how far out they can go and get by with, the limb broke.

Sad part now mortages are going to become tighter than all get out, who pays we all do, fudge a bit on an application it's common practice, fudge a lot just a matter of time before somethings gonna happen.

The smart got in and out at the right times, others gotta hold and hope for the best.
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Old 07-14-2008, 06:25 AM
 
3,283 posts, read 4,752,091 times
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i read this article, have allocated a thread to it but i can't help wanting to apss it around
10 Things You Can Like About $4 Gas - 10 Things You Can Like About $4 Gas - TIME
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Old 07-14-2008, 04:21 PM
 
Location: Lake Arlington Heights, IL
5,479 posts, read 10,660,849 times
Reputation: 2808
Default Increased frugality makes 10 good things about $4 gas list

58 Robbo,
Good link. I like the ones about increased frugality and decreased obesity. They missed the lower health care costs that will come with lowered obesity. Hard lesson for many "stereotypical" Americans who did not have depression baby or bombed out/nothing to eat WWII parents who pounded the concept of frugality into us, their children. Thanks Mom & Dad for teaching me it was not just about income but also about spending less than you take in. I still don't understand how so many American's don't understand this important yet simple concept.
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Old 07-14-2008, 06:18 PM
 
485 posts, read 1,804,200 times
Reputation: 215
Sadly, quite a few Americans don't make enough money to allow them to save.

I tried to live on one paycheck, and life was damned hard. There was nothing to save_ remember the jar I dumped my change into every night so that I could go to the Coinstar machine night before payday and buy food for my wife and I.

I didn't always need to, but I was glad it was there.

I learned a lot about frugality.

The well-to-do in America have been hogging the money to buy toys for years-squeezing the middle class/working class to death.

One wage earner to a family is a good thing-somebody can actually raise children that way, and have them experience human contact.

America took a wrong turn around 1970, and tried to repeal the laws of nature.
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Old 07-14-2008, 06:56 PM
 
16,092 posts, read 37,222,760 times
Reputation: 6280
Maybe the silver lining is that the real bubble burst will be the stupid materialism, consumerism, status sickness which has infected our country.
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Old 07-14-2008, 10:50 PM
 
Location: Charlotte, NC (in my mind)
7,946 posts, read 15,388,737 times
Reputation: 4544
This is no ordinary recession. If this was like 2001 or even 1990, yes I would say its a normal part of the business cycle and we will recover strong in a couple years. Unfortunately, our BEST CASE scenario would be something similar to the 1982 recession, which was the worst recession since the Great Depression. However severe this downturn is, it will most likely still be with us throughout the next decade.
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Old 08-11-2012, 09:53 PM
 
Location: Fairfax County, VA
3,719 posts, read 4,936,290 times
Reputation: 1464
Quote:
Originally Posted by EventHorizon View Post
Recession is a normal phase of the cyclical economic process. The real estate crash was the straw that broke the camel's back with the current recession. In my opinion, the greediest 10% with something at stake will lose something-if not everything, in this recession. Recession takes money from the greediest 10% and gives it back to those who didn't overextend themselves so much, or get caught with their pants down by buying five houses...
Do you still think this four years later?
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