U.S. Economy 2009!

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After 9/11 interest rates were lowered to an unrealistic number to keep the economy moving. Credit standards were also lowered. Home prices soon inflated to an unsustainable number simply because people were buying homes based on payments, and the lower interest rates lowered the payments, plus you had more buyers in the pool due to the fact that anyone could get a home loan. Those that didn't buy still took advantage of the situation by cashing in on their newfound equity at a lower rate. The economy was firing on all cylinders, but it was fueled on nothing but debt. After a couple years the defaults came pouring in. Credit tightened up to a point where it has overcorrected. People can't take on anymore debt to fuel the economy, and their liquidity went out the window as the value of their assetts tumbled.

The current and past administrations both contibuted to government bailouts to artificially slow the downturn. That was and is a huge mistake. Soon we will have to pay the inflation piper.

Cap all of this off with the new entitlement generation, where people think they are entitled to a college education, and then they are entitled to a good job afterwards, coupled with businesses realizing that these people really didn't learn any real world skills in college and the fact that the economy has slowed to a standstill, and you have lost jobs that just aren't going to come back.

In shrot we are tremendously screwed. Recovery is going to be slow and very painful. The question is do you want the government to keep interfering with the free market which may make the pain hurt slightly less, but last years longer, or do you want to let the market correct itself and suffer more in the short term, but recover much quicker. I guess a good analogy would be would you rather someone follow you around for 5 years constantly tapping on the back of your head with a hammer, or would you rather just have them give you one good whack and let you spend a couple weeks in ICU getting back to normal.

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A severed foot is the ultimate stocking stuffer. Mitch Hedberg