not understand how "incentives" really work...
in the real world...
These are two very different articles, but they address the same phenomena..., strategic defaults.
Last year, nobody even used the words, let alone knew what they were, how they worked or why the occurred.
That was then, this is now.
The first article is a very lucid explanation of how SD's work in our economy.
What he sees, correctly, is that when you almost eliminate the cost of housing...
you free up funds for other uses.
This is the reverse of divorce, where we learn, painfully, that two cannot live separately as cheaply as together.
Two homes, split visitation space for the kids..., two or more new lovers/friend to support...
Not a pretty picture.
But, here, now, there are a lot of people in the sand states - Cal, Nev, Fla & AZ
who are taking out a "free ride" for as long as it works...
The question this article addresses is: "What do they DO with all that freed up money?"
The second article
[more to be added later]
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How Strategic Defaults Are Boosting Consumer Spending
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How Strategic Defaults Are Reshaping the Economy
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