A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.
I guess lots more former homeowners can forget about taking the mortgage tax deduction on next year's tax return. Meanwhile, China continues to lose its appetite for U.S. Treasuries:
China trimmed its holdings of U.S. Treasury debt 1.3 percent in February, the fourth consecutive decline. Those reductions are raising concerns that the U.S. government could face higher interest rates to finance its soaring budget deficits.
Higher interest payments to foreign bondholders will require a greater contribution from U.S. taxpayers. Rising tax rates after 2010 are thus inevitable, either from Paul Volcker's proposed VAT (a good idea IMHO) or some other source. Forget about revived consumer spending. If your kid wants an iPod or some other cute trinket next year, tell them to go mow somebody's lawn and earn it themselves. When they grow up to pay their own taxes they might ask you about what life was like in the good old days, before real hardship. You can tell them we're living in the good old days right now.
