The Illusion of Wealth

There is a growing illusion that we are a wealthy country. No doubt on the basis of the GDP we are the richest country in the world but based on debt we are also the most heavily indebted country in the world and that is where people lose sight of it. During the boom years, people were under the illusion that there house values will go up forever and they started to rake up debt based on paper profits going on vacation, buying cars and just maxing out there credit cards under the illusion that the rising home values will offset the debt they have. But when everything especially the house prices came crashing down this illusion shattered.

Now this illusion is being carried over in states where the unions are fighting for the right to preserve their pay and promised pension and health care benefits when everybody has now come to know that the states are almost bankrupt or on the verge of it were it not for the deferment of pension payments that they are supposed to do. We are still under the grand illusion that we can tax and grow ourselves out of this recession and that the common citizens would keep on accepting higher property taxes and higher spending when they are really hurting due to high unemployment rate. To adjust to reality is really painful, and despite all the talk about the deficits and debt, the public still clamors for the same level of benefits while taxing the rich (which everybody knows have a limit to taxation). We will see how long this illusion of wealth will last before it sinks into common folks that we are all in deep debt and not rich.