- Joined
- Dec 9, 2009
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Here's the part you don't get ... in the early 80's when the rates went sky high, that affected peoples' ability to afford taking out a mortgage on the house. It didn't bankrupt them, they just had to wait until the rates came down to make the mortgage more affordable. If someone bought a house at $100,000 with a 17.5% rate, it's because they could afford it. Which also highlight s why Reagan had a better recovery than Obama. In the early e80's, the people who bought houses at 17.% rates were able to refinance their mortgage during the recovery period which provided them extra spending money which helped fuel the recovery.
Now compare that with the millions of people who did just the opposite in the mid-2000's ... they took out ARMs and deferred interest loans for extremely low interest rates and then couldn't afford to keep up with their mortgage when the fixed rate expired and the interest rates rose. They lost all their money and had nothing to help fuel a recovery. That's a big part of the problem for why the recovery has been so sluggish.
The big difference that you're incapable of understanding is back then, there was room to produce a recovery. That's a situation which doesn't exist now.
Back then, we were able to reign in inflation, thereby promoting growth; now, inflation is already low.
Back then, we were able to lower interest rates to spark investments, thereby promoting growth; now, the interest rates are already low.
Back then, income taxes were as high as 70%, plenty of room to reduce them to put more money into the economy; now, income taxes are already near historic lows.
Back then, national debt was not an issue, there was plenty of room to borrow to invest more money into the economy; now, the national debt is bursting at the seams and there's little more we can tap into.
All the things that could be done to generate a recovery were at Reagan's disposal back then and none of them are available now. And Obama isn't responsible for any of them except the debt, which Republican presidents contributed some 80% of prior to Obama becoming president.
Your missing the point as usual, high interest rates affected more than just homes and their prices. I don't recall ARMS being available in the 80's but I do know that today people who bought ARMS knew that those interest rates would reset or if they didn't they had no business buying a home. Sounds like a personal responsibility issue to me
Please don't tell me that I am incapable of understanding what went on during a period of time when you were either a kid or wasn't born.
You keep giving Obama the benefit of doubt in the face of data and results that are disastrous but because you are a liberal and an ideologue thus results don't matter.
It is obvious to me that you have no clue about leadership and how to influence a private sector economy. Hopefully that will come to you with age and experience. Attitude plays a major role in human behavior and Reagan knew how to motivate people. His tax cuts helped more than you will ever admit. Compare Reagan's speechs to Obama's. Notice any difference?