We feel compelled, at this time, to take note of the continuing flood of vigorous assertions coming from the very highest levels of the Administration and the Federal Reserve that we are going to avert a recession.
We are certain that homeowners will breathe a sigh of relief. Surely, it is most reassuring to those who will have seen the market value of their homes drop 20-50% from the 2005 peak to the bottom sometime in the next few years, and who have seen their equity disappear entirely or move deep into the negative column. Quite a few millions of homeowners, we suspect, will learn first hand what it means to be upside-down in their houses, where their outstanding mortgage debt exceeds the market value of their house.
Why should they mind this mere inconvenience, as long as we avoid a "recession?"
We are also comforted to know that the millions who may wind up losing 20-40% or more of their retirement, even as they watch their home equity evaporate, will understand that the government has been correct: there has been no recession.
Finally, for all those who will lose their homes, have their credit ruined through default, or go bankrupt as they are no longer able to service the massive credit card debt they were encouraged to take on (paying 20% PLUS in interest charges, with the blessing of the Federal Reserve, the banking regulators, the White House, and Congress), there is the gratifying knowledge that we will have averted a recession.
Is there no end to the good news, we wonder?
