[michmoldman]

Nothing the Government is doing will change this economy until the prices of everything comes down, especially housing, and autos. I feel they really should have focused more on the housing mess because that is the root of the problem. Of course most people have their biggest investment in their homes and autos, and that is where most of the paycheck goes. Once every thing else (example, food, gas) goes up people begin to pay late on their home and auto payment and everything snowballs. Of course all those arms are part of the problem but still, most people do not make the kind of money that can support the cost of everything going up every month, and not getting a raise. Unless something can be done to change all this things will never get better. If something could be done to say, have a very nice house with a payment of around $600 and $500 of that going to the balance, and a nice new car for say $200 a month, imagine the money left over to spend on other things. (These are just examples of course, and if it could be less, that would be much better.) This in turn would get the economy booming, and create tons of jobs! Also the actual balance on your home and auto going way down every month, would be a huge boost to your confidence! You would also not only have more money to spend on other things, but you could put more in retirement, and a healthcare system.
I do not know the answer to how this could be done, but there is no possible way with the cost of everything rising, the economy can recover. The biggest thing is housing. The cost of a house, the upkeep, and payments going to interest. Like I said, most people do not make the kind of money to be able to afford a nice house with the cost of everything rising. But what can be done?

[Driller1]

People need to live within their means. I do, I bought equipment long before I had cable and INTERNET.

[Coldjensens]

I am not sure that housing can come down anymore. In many places the price for a house is already less than the cost of building that house. Land really has no value at all becuase the cost of developing the land and building the houses, exceeds the income that will come from the houses if they are sold at current market prices. The result is that new houses are just sitting there not selling. The builders cannot afford to lower the prices ont eh houses to market prices and they cannot afford to have the homes just sit there, so the builders are slowly going out of business (small builders first - the larger ones will try to hang on to their properties and ride out the depression.)

If the price is going to come down further, then the price of labor, materials, insurance, etc. will have to drop as well. The result of that will be that the workers who build houses, and manufacture, sell distribute and instal various matierials will have to take huge pay cuts and will nto be able to afford houses. That does nto help our problem.

I am not sure what the answer is. I think that the day of the concept of everyone owning their own homes may be gone. We may all end up living in tenament buildings like they do in Europe. Of course that means that there will be fewer construciton jobs since tenament buildings requrie less work and materials to construct per unit than single family homes. That dumps us back into the same cycle.

The simlpe answer may be that Americans are now going to be comparatively much poorer than we were five years ago. We may have to start moving multiple families into single family homes and it is likely that very few people will be able to retire. Right now. I have no liklihood of retiring before I am 80. I think that a whole lot of people are faced with the same prospect.

[magellan]

Originally Posted by michmoldman

Nothing the Government is doing will change this economy until the prices of everything comes down, especially housing, and autos. I feel they really should have focused more on the housing mess because that is the root of the problem. Of course most people have their biggest investment in their homes and autos, and that is where most of the paycheck goes. Once every thing else (example, food, gas) goes up people begin to pay late on their home and auto payment and everything snowballs. Of course all those arms are part of the problem but still, most people do not make the kind of money that can support the cost of everything going up every month, and not getting a raise. Unless something can be done to change all this things will never get better. If something could be done to say, have a very nice house with a payment of around $600 and $500 of that going to the balance, and a nice new car for say $200 a month, imagine the money left over to spend on other things. (These are just examples of course, and if it could be less, that would be much better.) This in turn would get the economy booming, and create tons of jobs! Also the actual balance on your home and auto going way down every month, would be a huge boost to your confidence! You would also not only have more money to spend on other things, but you could put more in retirement, and a healthcare system.
I do not know the answer to how this could be done, but there is no possible way with the cost of everything rising, the economy can recover. The biggest thing is housing. The cost of a house, the upkeep, and payments going to interest. Like I said, most people do not make the kind of money to be able to afford a nice house with the cost of everything rising. But what can be done?

There are houses available in Detroit for less than $20,000. In fact, I think that was the average sales price in 2007. If enough law abiding working people bought these houses in blocks, you'd have a safe and relatively crime-free environment, and they would probably have to build new schools to handle the influx of people. If you put 80% down, then you'll be paying almost all principle. The payment might only be $150/month for your mortgage, or less. The solution exists today.

And there are cars available for $200/month, especially now.

[Bhaalspawn]

There's still plenty of room for houses to decrease here in Michigan. If housing is less expensive in Texas, then there's certainly room for the price of houses to decrease here in the Detroit area. when 1200 ft condos routinely go for $40,000 and when three bedroom 1700 homes routinely go for around $80,000 we'll know we're near the bottom. It will be a great time for working class renters with semi-secure jobs and savings who want to get a house.

Right now, as I see it, the housing prices are still too expensive relative to most people's incomes. If people start to flee Michigan in mass and if the Alt-A mortgage crisis hits, perhaps the prices will finally be driven back down to earth.

[michmoldman]

There is going to be a massive shift in the jobs and money being made in these jobs in the years to come. The days of automotive type incomes will be no more, especially if we want to keep jobs from going over seas. The economy is resetting itself because things are just becoming way to expensive relative to peoples income.
I think the norm will be a job paying about $10-$15 an hour. If the prices of everything do not come down, no one will be able to afford a house. You are seeing the prices of housing come down to where it should be, but needs to go further. This is why im saying the government should have spent most of the tarp money in this area instead of banks. Since most people are barely holding on to their homes and jobs, they should have done something like pay everyones (most everyones)mortgage down 10-20% and reset the payments accordingly at a fixed rate of maybe 3%
At least most people would be able to keep their homes and have money left to put back in the economy thus keeping more jobs from being lost.
They took all of our tax money and put it in the hands of idiots who in turn lined their pockets. Our tax money should have went back to us in some form.

[Cliffie]

Part of the housing problem is the number of ridiculous, 7-bedroom, 7-bathroom, 2-kitchen, ballroom-on-the-third-floor micro-cities being slapped together for childless couples, basing their house payments on overtime income. Everyone has to have a separate car, a separate phone line, a separate everything. I'm not sure it's prices that have to come down; I think the standard of living is ridiculously high and people have to get a grip. We do not all need to eat 7,800 calories a day and own 85 pairs of shoes; we just think we do.

[mostie]

I always felt that if the government made it illegal or taxed the daylights out of the companies that outsource jobs, and kept them in this country? That would make a BIG difference in the economy-

[Bhaalspawn]

Originally Posted by mostie

I always felt that if the government made it illegal or taxed the daylights out of the companies that outsource jobs, and kept them in this country? That would make a BIG difference in the economy-

If we were more nationalistic and rational and engaged in trade protectionism and ended illegal immigration and instituted a moratorium on legal immigration or at least reduced it to pre-1965 levels we'd be much better off.

Problem is, a huge percentage of Americans, especially the college-educated upper class and middle classes, have bought into the dogma that a free market economy and that free international trade is good and best for the economy as an absolute. For example, in debates they might mouth something about "comparative advantage" while being completely unaware that the conditions for comparative advantage to function (immobility of capital) no longer exist. Instead of actually acknowledging and addressing our nation's economic problems, the politicians, the intellectuals, the business leaders, and the media will just continue to sell Americans on the mythological notion that more and better education (for non-existent job positions) is the solution to our nation's economic problems. It's somewhat of a blame-the-victim mentality.

[cobolt]

Originally Posted by Bhaalspawn

If we were more nationalistic and rational and engaged in trade protectionism and ended illegal immigration and instituted a moratorium on legal immigration or at least reduced it to pre-1965 levels we'd be much better off.

Problem is, a huge percentage of Americans, especially the college-educated upper class and middle classes, have bought into the dogma that a free market economy and that free international trade is good and best for the economy as an absolute. For example, in debates they might mouth something about "comparative advantage" while being completely unaware that the conditions for comparative advantage to function (immobility of capital) no longer exist. Instead of actually acknowledging and addressing our nation's economic problems, the politicians, the intellectuals, the business leaders, and the media will just continue to sell Americans on the mythological notion that more and better education (for non-existent job positions) is the solution to our nation's economic problems. It's somewhat of a blame-the-victim mentality.

You are so spot on with this post. And plan to hear alot of rhetoric about your American and patriotic duty to elevate the living standards of third world countries by being taxed more and sending your jobs overseas. I had a co-worker tell me that the USA owed the world jobs and to put the rest of the world to work, at the price of our own country. There is alot of this mentality floating around, and in much higher and influential places than my co workers.