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7 Reasons Why the Mortgage Crisis Is Dragging Down the Entire Economy

There are 8,500 foreclosure actions taken every day in this country.

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And by the time you read this, that won't have changed.

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FOOTNOTES:

[1] Based on February's rate of foreclosures, rounded down to be make the estimate conservative. Foreclosure actions are defined as foreclosure filings and the sale of foreclosed homes.

[2] Based on January's price decline of 2.5% in total value, divided by a 30-day month, using an estimated total residential real estate value of $16.3 trillion that was derived from Federal Reserve data.

[3] A very rough estimate. Assumes that roughly half of the total housing value lost in the bubble is included in mortgage principal that's still being paid off (as opposed to foreclosures, etc.) This figure was derived from that amount, plus a rough calculation of the interest being paid and some assumptions about the remaining lifetime of the loan.

[4] Based on reported 2010 figures.

[5] It's a critical battle, of course - especially to the people who are counting on the government to serve its function in time of need. This piece addresses our warped financial perspective, not the very vital role government plays in our lives. That should not be in question (although it is).

[6] But wait, as the ads say: There's more. These homeowners can't refinance, either, because they don't have collateral (the houses aren't worth as much as the new loan). Alll the "quantitative easing" in the world won't touch them. So the banks are borrowing money cheaply and collecting it from these struggling borrowers at higher rates. [6]

[7] Nobody disagrees that it will be important to address the the Federal deficit over the long term, and Social Security's funding issues will need to be addressed before 2037, when the program will only be able to fund 75% of its planned benefits. (Any plan that cuts those benefits below that amount, or cuts them by that amount even before 2037, is a hoax designed to raid the money that working Americans set aside for that program.)

This post was produced as part of the Curbing Wall Street project and the Strengthen Social Security campaign.

This post was produced as part of the Curbing Wall Street project and the Strengthen Social Security campaign.

 
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