Time for another Recession? We’ve finally recovered from the one back in 2008, and a lot of folks think it’s time we had another one.
In case you’ve forgotten, the Great Recession of 2008 was caused primarily by pressure from Congress (mainly Congressman Barney Frank) that told banks to give low interest mortgages to low-income people who were unlikely to ever pay it back. That was a small percentage of the housing market. But it caused all home prices to balloon. So homeowners in their fifties, sixties and seventies (who should have known better) refinanced their nearly-paid-off houses with a 30-year loan at the high price, and lavishly spent the new-found money. Or they bought a new, more luxurious house at an inflated price.
When the housing boom turned into a bust, a lot of folks found themselves owing, say, $400,000 on a house worth only $300,000. Or maybe owing $200,000 on starter home, but with no income because they lost a job. A few unscrupulous bankers played a role, but the result was a crash in the housing industry.
That’s one way to start a Recession.
Now, we have other folks determined to start a new one in the next year. This small group consists mostly of twenty candidates for President and Democrat politicians hoping to unseat a Republican Congressman or Senator in 2020.
As a favor to the Democrats, here are three sure-fire ways to start a Recession.
- Don’t buy anything. Consumer spending accounts for two-thirds of the economy. So ask all Democrats to stop spending, except for the bare essentials. (What? No Christmas presents? Well, remind the kids that Christmas 2020 will be twice as good.)
- Sell all your stock, including retirement accounts; put it all into cash. Of course this only applies to those who did not already dump their stock the day after Donald Trump was elected in 2016.
- Don’t pay back student loans, only the minimum interest payment. Senator Warren and other candidates promise to cancel student debt anyway, so only a sucker would pay it off early.
Now, I’ll admit this is not guaranteed to start a Recession. But it would be fun to watch Trump and the Republicans scramble to prevent it.
Historic quotes by Will Rogers:
(After the stock market crash in October 1929) “When Wall Street took that tail spin, you had to stand in line to get a window to jump out of, and speculators were selling space for bodies in the East River… Now they know what the farmer has been up against for eight years.” DT #1013, Oct. 24, 1929
(my old friend, Speaker of the House) “Nick Longworth… blamed the Democratic party for the financial depression that is enveloping the world. It’s really the biggest advertisement that the Democratic party have ever had. Why, if they was that important, they wouldn’t be Democrats. They would all be Republicans.” DT #1312, Oct 7, 1930