Thursday, June 25, 2009

Broke dicks live pay check to pay check......

Raise taxes or gas prices and they collapse like a house of cards. These are the people who stand in line to get their checks so they can buy milk.

Or beer. Think they'll use government health care by the millions?

Spend and borrow, spend and borrow. Didn't work for them, won't work for Oba mama's plans either.

American Thinker: Recovery When? How About If?
1: Energy. While it is conventional wisdom that our economic woes stem from the bursting bubble in the housing market, few consider the needle that did the bursting.

When gas more than doubled in what was just a period of months, household budgets got devastated as trips to the grocery store and the pump took more and more of the limited dollars of the sub prime borrowers' budgets. This led to the next domino:

2: Housing Crisis: People needed to eat and get to work more than they needed to pay a mortgage they had not invested a down payment in, so they quit paying those mortgages in huge numbers.

So the gas domino nudged the sub prime mortgage domino -- which then toppled dominos in both the mortgage market in general and in housing prices. More and more mortgages were in trouble making more and more houses available making those houses worth less which in turn motivated more and more people to default on these mortgages.

It makes sense. If you have a 250 thousand dollar mortgage with no down payment, and that house is suddenly only worth 175 thousand dollars, why in the world would you worry about paying the mortgage since your gas and groceries are suddenly taking all your money to begin with? Well, many did not and still are not bothering to pay those mortgages. This led to another domino that very few saw coming:

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