Princess_Tina posted:But you probably would have been able to take the same steps in almost any developed country, wouldn't you? Yet other countries don't seem to have the recurrent bubbles that we have experienced in the U.S. And, yes, the situation affects individuals differently, but when the economy is doing bad, it can affect even those who have spent responsibly and avoided getting reckless loans.
Lowbacca_1977 posted: Princess_Tina posted:But you probably would have been able to take the same steps in almost any developed country, wouldn't you? Yet other countries don't seem to have the recurrent bubbles that we have experienced in the U.S. And, yes, the situation affects individuals differently, but when the economy is doing bad, it can affect even those who have spent responsibly and avoided getting reckless loans. English news was predicting that the economic issues facing the U.S. now are about one year off in the future and that the U.S. just was a little bit ahead of England going through the process and predicting the value of the pound dropping in a manner similar to the dollar of late. This was back in January. I'd note that this would be different to, say, the problems Ireland's having right now that seem to be largely spill-over from what's going in the U.S.
Princess_Tina posted:No, I don't think you understood what I meant. While it is true that sometimes the effects of a "burst bubble" in the U.S. spill over into other countries, I think there's been a tendency here in America to allow the same thing to happen, first with the dot-com's, now with the housing market. Whether or not this could or should be prevented via government regulation is a different matter.
Wikipedia posted:The UK property market initially peaked in July 2004 and had been static or falling in the capital and some other areas until late 2005. This had led many to start worrying about the possibility of a house price crash, many predicting the end of a major British property bubble. However, the property market strengthened considerably in the first half of 2006, showing particular strength in the capital. This has led many analysts to revise previously negative assessments of the market, with most now predicting continued modest growth in prices in the mid-term. [6] A house price crash would be very damaging at the present time due to record levels of household debt. There are an increasing numbers of bankruptcies and home repossessions which has worried some economists. This has led many to propose that a correction in house prices would lead much of the country into a lengthy recession. In contrast however, first time buyers who currently have assets not consisting of residential property, but with no way of attaining residential property (in some cases at all, and in others without undertaking unsustainable debt amounting to on average up to 5 times their annual salary), would be better off, and able to enter the property market.
Wikipedia posted:Current areas of concern to economists include Australia's large current account deficit, the absence of a successful export-oriented manufacturing industry, a real estate bubble, and high levels of net foreign debt owed by the private sector.
Princess_Tina posted:I think it's a good thing that some of you personally don't feel you were duped, but isn't it also important to ask whether Americans, collectively, have suffered the effects of certain economic policies (or lack thereof)?
Lowbacca_1977 posted: Princess_Tina posted:I think it's a good thing that some of you personally don't feel you were duped, but isn't it also important to ask whether Americans, collectively, have suffered the effects of certain economic policies (or lack thereof)? Yes, they are certainly suffering the effects of their own economic policies. A fool and his money are soon parted. That parting of ways is happening now.
Lowbacca_1977 posted:Personally, the greatest issue I'll face, and indeed, I think many Americans will face, will be consequences of these bailouts. Money that could be going to the roads I drive on, the school I go to, the police I call, will instead be going to someone who was fiscally irresponsible.
Lowbacca_1977 posted: The companies most effected, at least directly, were the ones involved in risky investments, and as such, I have no issue with the businesses engaging in those investments suffering, nor people losing houses that they can't afford. To suggest any fashion of policy should have been in place in this case based on the people that are laid off because of bad business moves is to, in effect, suggest that the government should be involved in how a company is run for the reason that they should make sure that company doesn't lose money. To me, that is a very foolish premise.
Lowbacca_1977 posted: It also draws focus away from the majority of the people being effected still being those that had mortgages they couldn't afford to begin with.
Lowbacca_1977 posted:Ok, my bad, I thought you were referring to the financial realm specifically, which is what's being hit hardest as far as job loss right now. I'd suggest that it hasn't spread that significantly yet into the rest of the economy to be triggering significant layoffs, although that's not saying it won't do so in the future as it definitely has the ability to do so.
Lowbacca_1977 posted:I don't, however, think that there is a way for gov't to actually prevent these situations without causing greater harm than good. Further, I think that if the gov't tries to patch things up artificially with the current remedies being proposed, it will lead to a bigger fall in the future.
Lowbacca_1977 posted:I would, frankly, much rather have us get hit now, and teach a lesson of the dangers of living beyond one's means, than patch this up for now and then in 10 years have a fall out that the gov't simply can't try to patch over.
Lowbacca_1977 posted:There are always people getting laid off... I do think that if they are living responsibly they should be able to manage that enough to transition jobs for a reasonable amount of time (say, a couple months), and that there is also things like unemployment where the gov't does help people that are unemployed.
Princess_Tina posted:Don't you think the country would be much better off if it was possible to avoid financial crises like this one? The government already has regulations in place to regulate a lot of other non-financial forms of behavior which can cause harm not just to the individuals which engage in them, but also to society at large.
Kimball_Kinnison posted:Princess_Tina posted:Don't you think the country would be much better off if it was possible to avoid financial crises like this one? The government already has regulations in place to regulate a lot of other non-financial forms of behavior which can cause harm not just to the individuals which engage in them, but also to society at large.You can't use regulation to turn stupidity into reason. The idiots just find new ways around it. The only way to ultimately fend off this sort of problem is for people to learn through their own hard experience what the consequences of irresponsible fiscal policies are.
Princess_Tina posted:Ordinarily I would agree with that, but the latest crisis has shown that when a whole sector of the economy is all but entirely unregulated for all practical purposes, bad things can happen that affect the whole economy. You could argue that people who are prepared for a recession regardless of cause, will be able to get through it, and I wouldn't disagree with that. However, if just a little bit more regulation could make the difference between a strong economy (which benefits all) and a wobbly economy (which sometimes affects people who behave responsibly) I would prefer the former. It's possible that a majority of Americans would prefer stronger regulations in place, because as we have now seen, the effects of a crisis in one sector can sometimes spill into the whole economy. In any event, I'm sure that if there is enough popular support for such measures, they might conceivably be enacted by the future administration.
Kimball_Kinnison posted:You can't use regulation to turn stupidity into reason. The idiots just find new ways around it.
Kimball_Kinnison posted: The one thing that you won't find in nature is a system that remains constant, or has continuous growth. Everything is in constant motion, growing or shrinking, ebbing or flowing. In the same way, economies cannot always be prosperous. You need to have the downturns to keep the economy healthy, just like a forest needs the occasional forest fire to remain healthy. Maintaining the myth that the economy always has to be growing is possibly the most damaging thing you can do. Kimball Kinnison
Princess_Tina posted:Lowbacca_1977 posted:I would, frankly, much rather have us get hit now, and teach a lesson of the dangers of living beyond one's means, than patch this up for now and then in 10 years have a fall out that the gov't simply can't try to patch over. Once again, it isn't simply a matter of irresponsible borrowers. There were a lot of other factors involved in the subprime mess. And some of those factors could potentially be subject to greater government scrutiny.
PrincessTina posted:Again, the consequences of the current economic turmoil amount to much more than simply ordinary layoffs. The taxpayer-financed bailout of Bear Sterns definitely isn't "business as usual". Don't you think the country would be much better off if it was possible to avoid financial crises like this one? The government already has regulations in place to regulate a lot of other non-financial forms of behavior which can cause harm not just to the individuals which engage in them, but also to society at large. To say that perhaps more government regulation shouldn't be required because "people should know better" seems almost like saying there shouldn't be any regulations in the sale of firearms, alcohol or tobacco because "people should know better" than to use them irresponsibly, or that there should be no speed limits because "people should know better" than to drive recklessly or at excessive speeds, putting not only their own lives in danger but also those of others. And maybe we should also get rid of regulations on prescription drugs and just let people buy whatever they might want, because "people should know better" than to self-medicate and/or abuse certain prescription drugs. And maybe we should also get rid of laws on illegal drugs, because "people should know better" than to use them or distribute them.
Lowbacca_1977 posted:Which other factors, exactly? At the end of the day, people got loans that they couldn't afford for houses they couldn't afford. And they were adults. The companies that gave them the loans are going to feel the pain of it too, of course, but they still took those loans.
Lowbacca_1977 posted: In short, yes. I support age restrictions specifically because I don't think someone is mature enough to know better, and in the case of guns, I think felons and those that have a history of serious mental illness also should be prevented from buying a gun, but aside from that, I think it should be something anyone could do. Just like I think there shouldn't be restrictions (other than age) on alcohol or tobacco, and that I support the legalisation of illegal drugs like marijuana. Just like there shouldn't be laws against trans fats, or that adults should wear seatbelts, or being overweight.
Jabbadabbado posted: E_S might make that case, if he were around. I don't think there's any avoiding a serious recession. Some of these efforts to cushion the blow - a homeowner buyout, etc., although they may make some people feel better in the short run, they won't solve any of our country's fundamental economic problems. If someone has an unaffordable house in an unsustainable housing development on the outer edge of suburban expansion, what is the value of helping that person hang on to that house for another few months. A lot of this is about federally subsidizing the risk of helping people convert their adjustable rate mortgages to fixed rate mortgages. After that happens, the housing market may deflate another 10-15% and then those fixed rate mortgages will be even farther under water than the adjustable rate mortgages already were. There's potentially a half trillion in real estate at risk of foreclosure right now. If you think that's bad, wait until the recession really hits and another million people lose their jobs. It might make sense to get some of these people out of bad housing situations now while the getting is good rather than encourage them to linger until the s really htf.
