The financial mess the world is in is getting scarier by the day. The graph on the left compares today's stock market with that of three previous recessions, including the Great Depression. It looks like today's S&P 500 is right on track with the DOW of the 30's. The scariest thing is that there is no consensus as to what to do. Nobel laureate economists can't agree on what caused and ended the Great Depression, even 80 years after the fact, so of course they're calling each other names over proposed solutions to today's situation. No wonder economics is called the 'dismal science.' I myself am very skeptical about borrowing and spending trillions of dollars to cure a problem caused by borrowing and spending trillions. The only ways to deal with that debt is to default or inflate it away. But at the same time, I support Obama's plan. In the early 30's, Hoover didn't do a whole lot and let banks fail and let people default on their mortgages. Fat lot of good that did for the economy. So Obama has to do something, and what he's doing is likely the least-bad solution out there.
1 comment:
I heard on the news that this mess won't be over until houses start selling again. Right now they are at too high of a price point to sell. Ironic isn't it? We are inflating home prices by propping the housing market up.
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