In a way, a household earning $100,000 a year (to use round numbers) can live high for a while and spend a little more than $100,000 a year. After all, they can cash in CDs, stocks and get a line of credit and so forth. However, eventually, the banks do not put up with this and or eventually we run out of CDs, IRAs and 401K money. As a country we have reached this point in part because somebody wanted to stop spending over the past few years and our salary has been cut. The Household no longer makes 6 figures.
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In a way, a household earning $100,000 a year (to use round numbers) can live high for a while and spend a little more than $100,000 a year. After all, they can cash in CDs, stocks and get a line of credit and so forth. However, eventually, the banks do not put up with this and or eventually we run out of CDs, IRAs and 401K money. As a country we have reached this point in part because somebody wanted to stop spending over the past few years and our salary has been cut. The Household no longer makes 6 figures.
Unfortunately, thats called the 'Duh' factor.
That was part of the housing boom as well.
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