There I go letting my need for a headline hook to get people to come to the site.
I really do not believe there is a recession. Is there a problem? Yes, perhaps larger than most think. And it goes way beyond real estate. However, I think a pretty good explanation of how we got here can be learned here in this powerpoint cartoon. (This came to me as email and no-one knows where it came from. I would love to give a link as it is funny, racy (bad words), and extremely informative. By the way any names that may seem similar to anyone or any company shhould not be seen as nothing but satire to educate a general point. The names used in this are obviously generalized, and not meant to imply anything about anyone.)
While the real estate/mortgage meltdown is concerning, especially to all of us who make our living in this space. The real concern that we have to consider is the out of control spending in Congress. The earmarks and entitlements have blown away any increase in tax receipts from the prosperity of the last several years.
We threw out the last Congress for irresponsible spending and behavior. This Congress has doubled the last Congress' already despicable deficit.
Two of the three remaining viable candidates for President are presently in Congress. Two out of the Three have gone hogwild with millions in earmarks in large part to pay off their donors.
In the real estate industry we keep hearing about irresponsible lenders and borrowers, who in the end get whats coming. However, we somehow overlook responsibility with our leaders. Who in the end get a high paying speaking tour.
Entitlements and payoffs are killing us. And as said recently by David Walker, GAO Comptroller General of the United States has stated that we have five to ten years to get fiscally fit. I Twill eventually cause higher rates which as you already know can make things much worst.
I live in the State of California. As a State we are the 6th largest economic power in the World! Southern California is the 9th. We have arguably the worst schooling. We actually had an L.A. School Administrator go to Afghanistan on a "fact finding" mission several years ago. The audacity to take what are really citizen paid vacations while Johnny can't read.
So I believe it is not the teachers fault as it is the upper level admins that are sucking that well dry. As mentioned in one of our L.A. papers the parking lot at L.A. Unified is like a Lexus and BMW convention.
But we do have the best after school programs. Our kids in several districts cannot get a new book. But football (it kills me to say this) is still in the budget. After school programs, breakfast, lunch and dinner is covered. And the State of California is B-R-O-K-E!
And these entitlements are just some of the many that I could mention that happen not just here in the land of LA LA. Economically, this party is coming your way. Thank your Senator. Or, change your Senator.