Economic Thoughts

The last financial crisis was primarily brought about because a debt house of cards fell apart.

Home ownership was considered a way to raise people into the middle class since the statistics showed that people who owned homes were generally increasing wealth faster than those who didn't.

The house of cards required homes to go up in value continuously so that the money lent recklessly would be safe because equity in the homes increased.

This actually worked for a while and because home lending was considered safe, despite the weakness of the loans, the money was repackaged into bonds with triple A ratings.

The whole scheme requires that the money you use to lend gets replaced as you sell the mortgage notes to get more money to lend.

It just required a little impetus to tumble down, as home prices stopped rising, money stopped flowing and mortgage payments stopped being paid.

Once money got tight the consequences were felt worldwide as we had an aptly named financial crisis as wealth disappeared and banks were in jeopardy.

We climbed out of that after a lot of pain and stayed out of it by injecting money into the system which acted like a stimulus replacing the money from the discredited junk mortgage market.

Its a treatment, but not a real cure.  A real cure would require the economy to grow without any Government stimulus.

It seemed to be going that way but then we elected the dontard who presided over a massive stimulus of a tax package that put money into the hands of wealthy individuals and businesses.

In addition the congress delivered a massive spending plan that also puts money into the economy.

Its money we don't actually have, so we have to borrow it.

The federal debt is the new house of cards and unless we get the deficit under control it wouldn't take much to see it collapse.

Maybe a trade war?