The Bush Boom

Bonddad has a good post up summarizing in simple terms the problems were having in the economy right now. The short version is that the "Bush boom" has been financed totally on debt.

I found this chart particularly interesting. It's a chart of the inflation adjusted real income over time:

Note that the inflation adjustment in the chart above is based on the, in my humble opinion, bogus government inflation numbers. If I'm correct, then incomes are even worse than the chart indicates. Sure, the rich have done quite well. But there are a lot of more the "not rich" out there who are steadily losing ground.

I remember thinking to myself a few years ago, "self?, how in the hell can all these people continue to by expensive home electronics and auto-tanks, aka SUV's?" I always suspected the answer and the above chart proves it. Folks have been spending all of their income AND any equity they have in their homes or anything else. There are a whole lot of Escalade drivers going around now feeling a whole lot poorer .... if they can keep their escaldes that is.