All over you see there is gloom and doom and there is no single magic bullet that someone can apply that can fix things in a year or so. These things were building up but people were too much absolved with themselves to see what was going to come. And now it is going to take an equal amount of years maybe five to ten years (if everything goes smoothly as the forecasts are saying) to fix these things. But the world is changing very rapidly and we as a nation are having a hard time adjusting to the new realty. If you look at Europe, although far away from us is still scarier to us since they are also mired in enormous amounts of debt. And I don’t believe that the debt is going to get repaid.
The coming scenario of higher defaults and foreclosures would be depressing sight to see but one silver lining is that after this cleanup, people and institutions can learn to live sanely and not go crazy with all kinds of exotic ways to present loans to people who will never pay or not understand (in the moment of temporarily loss of sanity). But as the history of the world tells us that human beings never learn from history and we as a nation are very ill equipped to face the new and fast changing realities of the new world where the competition would wipe out the less educated and less fortunate. It is a scary scenario to envision but unless people are scared into action, nothing would change.