Great Depression 2

Posted By: Dr. Frugal in Economics on 04/01/2008 at 06:42:52

This is a follow-up that seemed timely in light of this article in The Independent claiming that we're experiencing the Great Depression 2008 build. I still don't believe it even though the Drudge Reports posts news stories like 1 in 5 Ohioans on Welfare! and 1 out of 3 West Virginia families receive food stamps!. I think most people are pessimistic by nature and even if they're personally not experiencing any problems (other than high gas prices, falling value of their homes) they're so quick to scream "Great Depression 2" that it incites that same panic in everyone around them. Before totally freaking out consider this: is your home *really* worth less than you paid for it? If it is, did it ever occur to you that it's YOUR fault for buying it when you did? Everyone is so quick to blame everyone else for their problems that individual responsibility is often overlooked. I could have easily bought a house three years ago but did I really want to pay $300k for a house that I *knew* was $200k? Of course not, so I continued renting. Moreover, I have no plans to stop renting until I find a house that's actually listed for what it's worth and not some ungodly number being sold by someone desperate to make a profit because they overpaid; not my problem.

Comments

Posted by Ryan@Debt Reduction Formula at June 9, 2008, 4:12 pm:

That's a good point to remember: "Not my problem." I read in an article recently that there's another wave of foreclosures coming in Sep-Dec 2008 because of a whole rash of ARMs that will be resetting starting in September. Estimates are that 1 in 4 homes for sale will be bank-owned by the end of this year. Which means home prices have a lot further to fall.

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