inability to carry that debt. One: rising interest rates. Everyone—consumers, corporations, and, most of all, governments—is in debt up to the eyeballs. Look what rates did in 1994!
"For the most part, recently, we've enjoyed excellent economic growth. Growth that has enabled most to service their debts and still enjoy a higher standard of living. But, during these years of growth, the debt has also continued to grow. And each year of sustained growth brings us one year closer to an inevitable slowdown. We've always had recessions . . . and we always will.
"The slowdown will lead us to the second thing that can make carrying debt difficult. Economic woes: layoffs, shutdowns, lower incomes, et cetera, et cetera. In these days of one hundred and fifty thousand dollar mortgages, our society can't afford too many layoffs. You kids may not remember much about 1980 and '81, but these other guys know all too well how a recession works. Harold, the car salesman, sees his income drop from sixty thousand to twenty-nine thousand. He can no longer afford his fifteen-hundred-dollar-a-month mortgage payment, so he has to sell. But—uh-oh! Where are the buyers? Nobody else is doing too well, either. Harold drops his asking price daily, until he finally sells his house for thirty thousand less than he paid for it."
"Whoa, now, Roy. That may have happened in some areas, but it certainly wasn't the norm. In most diversified communities, real-estate prices held their own!" James Murray exclaimed.
"That's true. But at the time of that recession, debt levels weren't as high. And working women, smaller families, and the maturing baby-boom generation were not totally