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On The Economy: What Me Worry? with Richard Vague

Today, The Two Mikes spoke with Richard Vague who was a banker for 30 years and most recently retired from the post of Secretary of Banking and Securities for the Commonwealth of Pennsylvania.

Mr. Vague recently published a book called the Paradox of Debt: ­A New Path to Prosperity Without Crisis (Published by the Pennsylvania University Press/available at Amazon and elsewhere).

Mr. Vague said that he believed that the U.S. economy is slowly steadying and that in comparison to other parts of the world it’s in "okay shape". The Chinese economy. for example, is being greatly weakened by "out of control private sector debt." In the United States, Mr. Vague, said the Federal Reserve has overdone interest-rate hikes, and they seem to be bound to stay too high for a while.

He also noted that the housing sector is still a worry as there are only an inventory of 800,000 unsold houses in the country; at the time of the 2008 economic disaster there were 2 million unsold homes. Home sales are the most important swing factor in the American economy, a satisfactorily large inventory of unsold houses -- if paired with more reasonable interest rates -- contributes to spurring economic growth. At the same time, Mr. Vague noted that there are areas in that sector that are "booming", such as warehousing, Special Laboratory Spaces, and Medical Spaces.

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