Borrow against the future and spend now. Let rising values pay your obligations. It seemed like a good idea at the time. Then the bubble burst.

Does this describe 1) families who bought more house than they could afford or refinanced to cash out their equity, 2) banks that bought and sold risky investments that have turned toxic, or 3) some of our local governments whose budgets and debt grew faster than their communities?

Answer: all three.

There is much to be learned from the latest crisis. Overleveraging is bad. Future asset appreciation is unreliable. Income streams can dissolve. Credit availability can be suspended quickly.

The bottom line: don't live beyond your means.

What's interesting, and instructive, is how this economic calamity has wrought such similar problems on individuals, businesses and institutions. Those failing to balance expenses with income and debt with risk were ruthlessly caught short.

The consequences have been harsh. Among homeowners, many now owe more on their houses than they are worth, or have had adjustable rate mortgage payments balloon. The fortunate ones have no need to sell at a loss. They have curtailed all discretionary spending and sometimes made painful decisions to forego high cost expenditures like college tuition. Over time, they will survive. Others are not so fortunate. Too far underwater, they will be losing their homes and credit.

Local businesses have been hit with the double whammy of evaporating revenues and frozen commercial lending. Cash flow has slowed to a trickle and credit lines have been pulled just when they are needed the most. To survive, payrolls are slashed through layoffs, locations are closed or consolidated, unprofitable lines and divisions are simply put out of business, and owners survive on personal savings.

Of course not all homeowners and small businessmen got themselves in trouble. But, those that did have little recourse in these times. There is no bailout for them. They must take action by themselves, quickly and structurally. For many, this is not a time for minor adjustments. It is a time to make fundamental changes in the way one lives or works, to reinvent oneself to succeed in a changed world.

What about our local governments? Surely, as custodians of the public's money they did not succumb to similar problems.

Unfortunately, some did. Over the past few years, Chapel Hill and Orange County spending has grown at a rate far outpacing the growth of their communities. This has been financed by property tax increases, funds taken from reserves and bond sales.

Like many people and businesses, our governments spent with relative abandon during the heyday of good times, banking on future growth to cover the increased obligations.

Unfortunately, they are now also being caught short. Revenues tied to retail sales and building and development have dropped. Costs to run expanded programs and facilities continue to grow. Budgets, which must be balanced, aren't.

Extricating ourselves from this situation will be painful. The promise of no tax increase during the recession will be broken. Current programs will be cut and future plans delayed or cancelled.

Many people, businesses and institutions got caught up in the euphoria of the latest economic bubble. When this is all over, when the great recession becomes a history lesson, will anything be different? Will individuals be more responsible to themselves, corporations more responsible to shareholders, and governments more responsible to citizens?

It's hard for any one of us to keep some folks or businesses from making bad decisions. But we all, as voters, have a say in whether our elected officials more prudently manage our public resources. Collectively, we need to start living within our means.

Mark Zimmerman is a small business owner in the real estate industry in Chapel Hill. Contact him at markzimmerman@nc.rr .com or his blog www. RealEstateTriangleBlog.com