Saturday, August 24, 2008
Nobody can borrow and consume their way to wealth; no city can do it, no state, and no country either. For the past 25 years the US has been progressively producing less and less, consuming more and more, and borrowing to cover the difference.
Today I stacked wood for the winter, which is always satisfying, and thought about where we really are in this credit crisis. That was decidedly less satisfying.
It is important to remember that we did not get here all at once, and that this crisis was not caused by subprime mortgage defaults. Rather, those were effects, while the cause was the cumulation of 25 years of progressively larger borrowing…
