Japan has seemed to me for some time to be a pretty good model of where the U.S. might be heading. 20 years after the peak, Japan's stock market is still down 70% and property values are down by similarly horrifying amounts.
Given this Japanese roadmap, who on earth would buy overpriced California real estate just a few years into the U.S. bust?
Prompted by an e-mail exchange with the always wise and friendly Patrick of Patrick.net, I found this:
Japan deficit may expand to 2% of GDP by 2012
Two percent??? Is that a typo? We are running deficits around 10% of GDP (thank you Obama $787 billion porkulus that created or saved approximately zero jobs), with not even a pipe dream of ever getting the deficit below high single digits even 10 or more years out! Granted, the Japan article is talking about primary deficits (meaning excluding interest costs), but in the U.S. interest makes up only a couple hundred billion out of a $1.4 trillion deficit.
Japan isn't the roadmap. Zimbabwe is.