More on The Dire Economic Future
August 28, 2010 Leave a comment
This could well be the future we are in for, and this is what the City of Coral Gables should consider in reorganizing government, reducing staff and rationalizing pension funds and other benefits.
It could happen that property values will not return for many, many years. Does this mean that the City of Coral Gables, Miami-Dade County and the State of Florida can keep raising taxes, indifferent to the financial conditions of their residents and businesses?
Read the following for taste of reality (and history). This explains why my parents, who lived through the Great Depression, were so frugal and conservative with their money.
The Reinharts examined 15 severe financial crises since World War II as well as the worldwide economic contractions that followed the 1929 stock market crash, the 1973 oil shock and the 2007 implosion of the subprime mortgage market.
In the decade following the crises, growth rates were significantly lower and unemployment rates were significantly higher. Housing prices took years to recover, and it took about seven years on average for households and companies to reduce their debts and restore their balance sheets. In general, the crises were preceded by decade-long expansions of credit and borrowing, and were followed by lengthy periods of retrenchment that lasted nearly as long.