There's a big elephant in the room
In 1989, property values were escalating much the same way they were about three years ago. I was selling real estate at the time and I remember that real estate values were escalating so fast that there was nothing to comp them to for appraisal value. Sellers were actually looking for excuses to sabotage the escrow so the buyer would back out because two months into escrow, the property being sold was worth a few thousand dollars more than the selling price, they wanted to sell it again! That situation was very similar to what was going on a few years back. And what happened in 1990 is very similar to what is happening now. The bubble burst, values declined, then a few years later slowly started rising again. I guess you call that an adjustment. The same thing happened with the stock market in the late nineties after the dot com market peaked.
What I witnessed and felt during each of these up cycles was the unspoken "WTF?" It felt too good to be true for the sellers and the stock holders, so good in fact that we intuitively knew it couldn't last, but didn't really want to talk about it, maybe for fear of putting a jinks on it. But really, when I saw my property, that I bought in 2004, go up in value about 75k in one year, I knew something wasn't right, we all did.
Now that I'm getting old enough to have lived thru, witnessed, and been a part of a few of these cycles, I feel that I can begin to smell trouble when it's brewing. And trouble is brewing right now, were just not talking about it.
Our national debt is over 9.2 trillion dollars and growing by about 1.2 million dollars every minute. 19% of all of our tax dollars are going towards the interest alone on this debt. In 2006 we paid 406 billion dollars in interest on our debt. We are clearly living beyond our means. When a working family keeps borrowing more money every month to get by, even borrowing to pay the interest on what has already been borrowed, it's only a matter of time until that family faces bankruptcy. Our government is just one big family, and we as a family are not handling our finances very well.
Some say the solution is a Federal Balanced Budget constitutional amendment. Two thirds of voters agree. I don't really know enough about economics to understand what the down side could be to putting a forced cap on our spending, but it seems to me we have to do something, and sooner than later. There's a big elephant in the room and nobodies talking about it!
Comments
"Our national debt is over 9.2 trillion dollars and growing by about 1.2 million dollars every minute. 19% of all of our tax dollars are going towards the interest alone on this debt."
This is a big reason why so many of my old friends, especially the highly-educated professional types, have been emigrating to Euro nations especially Germany, Austria or France, even raising their children there. (Nobody goes to the UK, debt there even more awful than USA.)
The earning power for a professional, especially a well-educated technical professional with skills in things like computers, goes way up for someone earning their income in Euros rather than increasingly worthless dollars. But also, this ridiculous amount of US debt is going to have to be paid in about 15 years or so when the US-issued debt instruments sunset-- which means anyone still here, and their families, is going to be stuck with the bill.
And many European countries provide facilitated citizenship for someone with ancestry in the relevant country, and who have professional skills and background. For example, Germany gives accelerated citizenship not only for German-Americans but also those with Dutch, Swedish, Norwegian, even English/Scottish/Polish ancestry (those Anglo-Saxons first came from Germany I guess). Italy gives faster citizenship to Italian-Americans. France gives it to those with Huguenot or French ancestry (lots of people in Louisiana, Maine, Michigan qualify).
The only real hurdle is language, you do have to learn German if you work in Germany, French in France, Italian in Italy and so forth. But it's not really that hard to do in practice when you live there, apparently. (And, frankly, with Germany the leader and economic engine of the European Union, German is useful just about anywhere and as a Germanic language, it's easy for an English-speaker to learn.)
Moreover, the language difference provides yet another big earning opportunity for Americans, Canadians, Australians and Britons who move to a place like Germany and France-- one of the best ways to earn a lot of money on the side, is to translate technical documents, novels, articles, papers and other information of value, into German in particular, or sometimes into Italian or French. An old pal of mine now living, working and raising 3 children in Germany, is doing just that. His day job is as an engineer in eastern Germany, so he's already wealthy from the saved-up Euros for a 45 hour/week engineering job. But he spends about 10-20 hours a week in many months to translate scientific papers and technical guidelines into German, even a couple science-fiction novels. And he's basically become a multimillionaire over the years doing that.
Posted by: Craig | December 19, 2007 05:38 AM