Debt and Denial - New York Times
Krugmania! Now more than ever.
since most can't read the above without the magic password from the times selectoton, here is an excerpt, and a choice one at that:
"Last year America spent 57 percent more than it earned on world markets. That is, our imports were 57 percent larger than our exports.
How did we manage to live so far beyond our means? By running up debts to Japan, China and Middle Eastern oil producers. We're as addicted to imported money as we are to imported oil.
Sometimes large-scale foreign borrowing makes sense. In the 19th century the United States borrowed vast sums from Europe, using the funds to build railroads and other industrial infrastructure. That debt-financed wave of investment left America stronger, not weaker.
But this time our overseas borrowing isn't financing an investment boom: adjusted for the size of the economy, business investment is actually low by historical standards. Instead, we're using borrowed money to build houses, buy consumer goods and, of course, finance the federal budget deficit. "
Good times, people, good times. As someone who lives at the epicenter of the housing bubble, i feel it is incumbent on me to set 100 dollar bills on fire while drinking expensive champagne. that's what the neighbors do around here, anyway.