“The danger is that housing prices continue to tumble and accelerate, people’s ability to pull out equity will evaporate, and you’ll see a serious downturn in consumption.”
This from Dean Baker – chief economist at the center for economic policy.
My translation: “People no longer have access to money they don’t really have – so they won’t buy a bunch of crap they can’t afford, and put their house up as collateral. They may actually have to live within their means – which will destroy the profits of banks and huge corporations”
Or – the economy will keep getting worse, because people will stop doing the stupid things that got us here in the first place.
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