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To whom it may concern,
I just read the article on the "great depression: the sequel," and I have to say that even though it may seem like we are in gear to go to a depression, we aren't. What's happening right now is probably the best thing for the economy and I will tell you why.
I live in the DC Metropolitan area and I can tell you that the housing market went crazy here since 2002. 1 year you are buying a SFH for $200K and the next year you are paying $500K for the same house, while our salaries did not match the market and that is the problem we are having. Once the housing market finishes with this huge hit, the economy will bounce back significantly because people will have more money to spend on other goods, like TV's, cars, etc., which replinishes jobs and stabalizes the stock market. The downfalls of this are, banks get smacked and people's credit gets hit hard due to foreclosure or short sales, but unemployment goes down because people are spending more money which creates more jobs and in the long run this will help the economy out. We only have a 4.5% unemployment rate and companies are still hiring. Maybe the banks will think twice before offering ARM's that allow people to buy an $800K home which they can afford for 1 to 5 years, but need 4 jobs in order to pay for it afterwards, hence the foreclosure's and housing hit.
It is articles like this that has everyone freaking out about a depression because the simple phrase "depression" has people hermitted in their homes afraid to spend money and in turn hurts businesses that are relying on these very same people to go out and buy items from them.
