Civil War, Part II

[kandrathe]

Yes, there are people who push their cost of living so far that they can't afford to do anything but work and pay their taxes.

I did find some data on country by country comparison of household savings rates. It might just be my impression, but I believe that people in the US are more likely to have more unsecured debt.

It still begs the question of the sanity of a culture that expects a person to live on less than 40% of their earnings, or put in another way, for every two years of work you get one year for yourself, and you work one year for the government.

But that kind of stupidity does not know borders, I'm quite sure you could find plenty in USA (wasn't there something about mortgages and banks not working out as intended recently:P).

It is more complicated than stupid consumers. Much of this crash is related to the tech bubble bursting in 2000, and vast amounts of capital eager for an investment vehicle that would yield better than 1% due to the hyper low interest rates. It has to do with China's currency manipulation, and the Feds allowing mortgage backed securities to be mostly unwatched and unregulated. Then, enter Freddie and Fannie which are guaranteeing loans to everyone who can spell L-O-A-N, and a credit market thats become rife with NINJA loans.

But, yes, Pete's TANSTAAFL caution also applies. If it sounds too good to be true, then it probably was a bad idea. But, like all crazy ponzi schemes, they seem like good opportunities to those who got in early, and fraudulent and criminal to the ones who lost the farm. Much of the problem with houses now are that people have very large mortgages on assets whose value has diminished substantially. So, they intentionally need to walk away from their bad investment, which unfortunately also is the place where they live.