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Many of the middle class were existing homeowners that were suddenly flush with huge appreciation equity in their homes. Why not tap this with a quick, 24-48 hours in some cases, 2nd mortgage? This was viewed and in most cases spent like the free money it actually was.
Then the housing bubble explodes, jobs are lost not to return, consumer spending of this free money stops, tax bases decline, etc ......
Life as a middle class American is gone forever for a large percentage of our population.
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