jpete wrote:Well, you have to understand that as a population, we've been marketed to, and as a whole, marketing WORKS.
You had GWB standing up applauding the highest rate of home ownership in history. Greenspan was out pushing adjustable rate mortgages and everyone was screaming about how if you didn't buy a house NOW, you were missing the best market in history.
Eventually, the collective push works on most people.
They do it because happy voters don't upset apple carts come election time. And what makes people happier than "stuff"?
But you can't have good old American "bigger, better, faster, more" unless you print more money every year.
Gold, even if tied to a fractional reserve system, limits how much money is in circulation.
But without a bottomless pit of money, you can't promise your constituents the moon, now can you?
As everyone's mom used to say; "If everyone else was telling you to jump off a bridge you wouldn't do it now would you".
Ultimately we are all responsible for our own decisions. In the middle of all that craziness I upgraded my house and paid cash (move from San Francisco to Maine and you can get twice the house for one third the money). I suppose I could have gotten a low rate mortgage and played with equity in the stock market (lots of people did). But I don't like debt.
I honestly don't think it was the home ownership rate
that was the problem, I think the middle class buying McMansions they could not afford was way more detrimental than poorer people buying manufactured homes they could not afford. The economic downside of defaulting on a $150K mortgage is way lower than defaulting on a $1.5M mortgage. The middle class is where people also got cute financially. How many Porsche Boxters, H2's, flat screen TV's, and fancy vacations got paid for with equity lines of credit? Taking out a mortgage to buy something that depreciates as fast as a car does is the stupidest thing one can do financially.