More economic disaster on the way, and what should be done about it

David Nebenzahl · 2009-01-22T19:29:15+00:00

Just read an excellent piece on the second wave of the economic crisis that's about to hit us, and what should be done about it. Article at note on the source: Counterpunch is the decidedly left-wing soapbox of one of my favorite commentators, Alex Cockburn. However, unlike most on the left, he brings in a wide range of points of view, many of which surprisingly coincide with his own.For those who object to the opinions of lefties, a word on the author of this piece: from the mini-bio at the end of the article: Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He is coauthor of The Tyranny of Good Intentions.=======================================================================Another Real Estate Crisis is About to HitBy PAUL CRAIG ROBERTSFor a picture of the US real estate crisis, imagine New Orleans wrecked by Hurricane Katrina, and before the waters even begin to recede, a second Katrina hits.The 1,120,000 lost US retail jobs in 2008 are a signal that the second stage of the real estate bust is about to hit the economy. This time it will be commercial real estate--shopping malls, strip malls, warehouses, and office buildings. As businesses close and rents decline, the ability to service the mortgages on the over-built commercial real estate disappears.The over-building was helped along by the irresponsibly low interest rates, but the main impetus came from the slide of the US saving rate to zero and the rise in household indebtedness. The shrinkage of savings and the increase in debt raised consumer spending to 72% of GDP. The proliferation of malls and the warehouses that service them reflect the rise in consumer spending as a share of GDP.Like the federal government, consumers spent more than they earned and borrowed to cover the difference. Obviously, this could not go on forever, and consumer debt has reached its limit.Shopping malls are losing anchor stores, and large chains are closing stores and even going out of...

Jan 22, 2009 20 Replies

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ds549 17 years ago

IF IT DOES GET WORSE, I DONT THINK ANYONE HERE WILL HAVE AN ANSWER OR BE LISTENED TO BY THE PEOPLE IN POWER .. BEST THING YOU CAN DO IS TAKE CARE OF YOUR FAMILY AND FORGET THE BIG PICTURE...

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More economic disaster on the way, and what should be done about it

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