Rx for economic pain: It's time to face some uncomfortable truths

[DixieBelle]

But the remedy is illusory. Homes are not worth what they used to be, and for the Fed to attempt to disguise the fact would create even more uncertainty in a turbulent market. That, in turn, would merely postpone the day when prices hit the inevitable bottom.

When you have a loss of wealth, the best way to cope is to accept it and adapt to a lower standard of living, sooner rather than later. Sending out rebates, eliminating gas taxes, bailing out homeowners and accelerating monetary growth, among the proposed remedies, do exactly the opposite. They spare us the obligation of dealing with reality by making us feel richer so we can keep on as we were before.

But they don't change the stark fact that we are poorer now and will remain that way for some time. And they ultimately backfire by wasting money, igniting inflation or both.

In the long run, we will adapt to the new realities, the economic impact will moderate, and the pain will fade. Till then, our least destructive option is to do something no politician would dare suggest: Suck it up.

http://www.reason.com/news/show/127892.html

I quoted the very end. Go read the whole thing.

[rich_t]

Interesting read.

[Jim]

they don't call them corrections for nothing.

[Chris_]

But minorities and the poor are the hardest hit! We can't ask them to Suck it up!! What about The Children????

We have to Do Something!!

BOO HOO BOO HOO!

[Inga]

We could go back to gardening, horses and bicycles. Start up communities meetings on bartering and reteach the basics for survival.

Most kids today don't have a clue. It will eventually go back to many of the old ways.

[john c calhoun]

so I guess this correction would lead to  the EXACT OPPOSITE of what GWB told us to do from 2001-2006 ??

'GO OUT AND SPEND MONEY"

is that what led to all the BAILOUTS the banks & mortgage lenders have been getting these past two years ??

any neo cons around here want to DENOUNCE that form of welfare & that DUMBASS ECONOMIC PLAN that your president laid onto the laps of americans ??

or is just bad for regular taxpayers to get 'rebates' &/or bailouts ??

corporate cronies getting bailouts = good

average individual taxpaers getting bailout = bad

[Jim]

so I guess this correction would lead to  the EXACT OPPOSITE of what GWB told us to do from 2001-2006 ??

'GO OUT AND SPEND MONEY"

is that what led to all the BAILOUTS the banks & mortgage lenders have been getting these past two years ??

any neo cons around here want to DENOUNCE that form of welfare & that DUMBASS ECONOMIC PLAN that your president laid onto the laps of americans ??

or is just bad for regular taxpayers to get 'rebates' &/or bailouts ??

corporate cronies getting bailouts = good

average individual taxpaers getting bailout = bad

Spending money makes the economy work so long as its not with unrealistic debt.

The problems with lenders was making unrealistic debt.  Partly due to legialative pressures, part from general purpose stupid.

Bailouts bad irrespective of the beneficiary.  But sometimes the results of inaction would be worse.

[john c calhoun]

so I guess this correction would lead to  the EXACT OPPOSITE of what GWB told us to do from 2001-2006 ??

'GO OUT AND SPEND MONEY"

is that what led to all the BAILOUTS the banks & mortgage lenders have been getting these past two years ??

any neo cons around here want to DENOUNCE that form of welfare & that DUMBASS ECONOMIC PLAN that your president laid onto the laps of americans ??

or is just bad for regular taxpayers to get 'rebates' &/or bailouts ??

corporate cronies getting bailouts = good

average individual taxpaers getting bailout = bad

Spending money makes the economy work so long as its not with unrealistic debt.

The problems with lenders was making unrealistic debt.  Partly due to legialative pressures, part from general purpose stupid.

Bailouts bad irrespective of the beneficiary.  But sometimes the results of inaction would be worse.

yep...

and same goes for the INDIVIDUAL BAILOUTS/REBATES that we've all gotten these past few months...

I took my $1750 bucks & bought a pellet stove which will provide my family w/ heat this winter, that I wasn't gonna be able to provide them with otherwise WITHOUT GOING INTO DEBT AGAIN

also on the 'tax free weekend', I spent over 3k on insulation, fuel & other necessities that will save me money in hte long run, protect my house/family & my greatest investment (my house)

that $300 I saved  NOT PAYING TAXES that weekend ended up paying for most of the work in my son's bedroom that needed to be done...

yeah, hard working/frugile individuals NEED these bailouts/rebates too .. ..but because someone like me going w/out proper heat or household improvements, isn't gonna effect the tea in china, so neo cons cry 'nobody needs them' (only their needs actually)