There is that old saying about what goes up must come down. It's not very popular anymore, since it can be shown that we fire rockets up into space that, in fact, never come down.
People used to associate this saying with financial markets as well. But it was not always true there, either. No matter how bad the drop, the markets always are above where they started.
Perhaps people have begun to distrust this piece of wisdom so much that they ignore the warnings when it comes to their money. Booms are always followed by busts, and those who don't heed this reality are doomed to be busted the worst.
It's easy to lose perspective when you are in a boom. I remember how I felt back in 2000 at the end of the dot com boom. I had a new dot com job that paid double my old job. Even after all the stocks tanked, my co-workers and I were all optimistic that everything would bounce back, right up until our division was shut down and we were all laid off.
Back then the boom was in tech stocks. Now, the boom - and the bust - is in the housing market.
Everything was looking great when all of our homes were doubling and tripling in value. Even now with prices dropping, I see a lot of optimistic people who think it really isn't anything to worry about.
Been there, done that.
The first hint of trouble I saw was a report a couple of years ago that 47 percent of the new mortgages in California were no-interest, adjustable-rate loans. The only people who would dare take out such risky loans would be those who were speculating on real estate values going up. These kind of mortgages are great if you are flipping homes in a hot market.
But when housing prices drop, those people get hurt.
Economists don't usually get so caught up in the excitement. The wise ones know that booms never last, and that measures should be taken to slow down the booms in order to soften the following busts.
But politicians love booms. They don't want to do anything to slow them down. The Clinton Administration did their best to throw fuel on the dot com fire, and they left the mess for the Bush Administration to clean up.
But the Bushies weren't interested in cleaning up. They needed their own boom, and the housing market was ripe to be exploited. That led Federal Reserve Chairman and boom-master extraordinaire Alan Greenspan to do things like promote adjustable-rate mortgages at a time of historically low interest rates, as if there was some other place for rates to go but up.
Unlike the dot com crash when a good amount of the wealth that was lost was on paper, the housing bust is causing people to lose their homes.
Foreclosures are hitting record levels. Nevada now leads the nation in the percentage of foreclosures, with one out of every 40 homeowners losing their home.
Speculating on stocks is one thing, but betting your home is quite another.
How bad is the problem? Angelo Mozilo, CEO of Countrywide Financial, the largest U.S. mortgage underwriter, reported last month that the company "is seeing home price depreciation at levels not seen since the Great Depression."
And now that prices are falling, the home equity well is drying up. The economy fed off of this money for the last five years as Americans piled up debt as if there was never a need to pay it back. Now that the party is over, all that's left is the mess, and the mess threatens to take down the entire economy. It could make the dot com meltdown look like a picnic.
Unfortunately, American consumers are following the bad example set by the federal government. Instead of using the good times to save money, we spend, spend, spend, and then borrow even more, and hope the day of reckoning never arrives.
At some point we will have to break this debt habit, before it kills us. Maybe credit rehab is in order.
• Kirk Caraway is editor of http://nevadapolitics.com and also writes a blog on national issues at http://kirkcaraway.com.