Lost Decade, Found Wisdom - Daily Kos

Rapidly changing technology brings new products into the home at a pace never seen before. Rising home prices lure renters into buying and tempt homeowners into moving up. A sea of new lending instruments fuels both a boom in consumer purchases and an explosion of investment derivatives.

If that sounds like a description of the last eight years, it is. It's also a description of America in the 1920s.

Eighty years ago, consumers were eager to own vacuum cleaners, radios, and refrigerators -- just as consumers today lust after DVRs, flat-screen TVs, and the latest computers. And in both cases stores and banks extended more and more credit to keep the debt-driven action going. Thanks to efforts both then and now to free the financial institutions from regulation and "creativity" among lenders, the pool of available debt became staggering.

For most of the nation's history, the burden of debt was equal to about half the gross domestic product. Only twice did that debt rise so sharply that more money was owed than the total of all the goods and services produced by the national economy. Once was in 1929. The other time was in 2008....