The Answer Is Right Behind You
It was clear to Alstry that the entire housing industry in America was based on massive borrowing and spending.....and without reckless lending.....housing would collapse. At the peak, we were borrowing about a trillion dollars per year just on home equity loans.....and building over 1.5 million units per year.
Once bankers started cutting off credit.....it was obvious housing and construction would collapse.....and it has, residential construction AND home equity borrowing is DOWN OVER 80%....and falling.
Today, Washington and Wall Street has picked up some the borrowing slack.....Washington alone is borrowing over $1.5 trillion (not including state and local government borrowing) plus Wall Street is borrowing a similar amount (not including the trillions provided to banks)....combined, the two are borrowing OVER 20% of the GDP.
With this kind of borrowing and spending......our economy should be booming....salaries should be rising, sales exploding, tax receipts growing etc........
Instead, in many segments our economy is continuing to contract and tax receipts are shrinking.....DESPITE MASSIVE GOVERNMENT/WALL STREET BORROWING AND SPENDING.
Now the only question is what would happen if government couldn't borrow and spend anymore? My suggestion is look to housing.....it is right behind you....but this time, there will be no one to bail out government.