I think in our sense of depression and recession...related to past experiences...I would question the definitions of the two in present-day society. There are people today, who haven’t worked for over a dozen years and live out of dad’s garage, with him giving them $300 a month for pizza and beer. There are people who make a combined income of $250,000 a year....yet because of car loans, college loans, house debt, and credit card loans...they have barely $300 a month to use for non-essentials. There are guys churning out $3,000 a week in illegal and illicit drug sale profits...yet they can’t really report it and they have to pay for everything with cash.
Even with the 2008 drop, which really were about constructed loan packages, which no one in the banking industry could really explain on profitability or risk...we are in a new era where old definitions no longer fit.
I am 74 and feel as if I live on a different planet than I was born on even though I can drive from here to the place of my birth in an hour. When I was a child whole families survived for a year on what it takes to rent a SMALL house for one MONTH now. A neighbor rented out a farmhouse for a whole year for $120 in ‘52 and that is not even a decent eight hours pay now in this area and you couldn’t make it on that much per hour in some places. If social security had been adjusted according to REAL inflation figures the average recipient would be getting at least two or three times what they get now and the system would be belly up. What used to be an unimaginable income is now poverty. A person can go through what used to be the price of two dozen new houses to pay for college, come out with a degree and not be able to pass my eighth grade finals.
Even with the 2008 drop, which really were about constructed loan packages, which no one in the banking industry could really explain on profitability or risk...we are in a new era where old definitions no longer fit.
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The mortgage scandal was destructive to the economy, but the Federal reserve made it much worse. The Fed and Obama are the mainly why we have trillions of dollars of debt.