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It seems to me greed caused some bad decisions in the housing crunch. You can't blame either side of the political aisle if you ask me.
Easy-to-get high priced loans made otherwise poor people feel quite rich as they moved into homes way beyond their means.
That led to inflated valuation of homes because it was easier for EVERYONE to live beyond their means and pay MORE for houses. Every home in the neighborhood that was sold for more than it was worth caused the other homes in the neighborhood to appraise higher.
That led to people with good loans refinancing their homes at a higher value. They thought they struck it rich and didn’t necessarily hold on to their newly found fortune. Instead they consumed it. Now they are stuck with homes not worth the loans they have on them and many are simply headed for foreclosure meaning now the banks own these homes they paid way too much for...which I guess now means WE own these homes the banks paid way too much for.
Blame the appraisers and the lenders who worked quite closely together in this whole thing if only with the wink of an eye! You can’t tell me they were incapable of regulating themselves. You can’t tell me they haven’t seen this coming and haven’t been rat holing millions while they steered the market right into the ground. Their dynasties are built and we’re left holding the bag.
Credit credit credit. It's just a way for us to live beyond our means. Business owners don't even operate without it anymore. If you sell widgets, you don't buy widgets at wholesale then retail them anymore. Instead you borrow the widgets and demand cash from consumers who might borrow that to buy your widget. They pay the retailer's markup which now includes the cost of borrowing the widget which was probably built with borrowed goods in the first place. The consumer pays the cost of their own credit, the manufacturer’s credit and the retailer’s credit. It seems a lot of the risk of doing business has disappeared as has the risk of buying a home. Worst case you go bankrupt and some socialist package will emerge to bail you out.
No one should be under the illusion that socialism in our economy is somehow a new concept Obama wishes to introduce.
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6 comments:
Grown-ups don't buy things they can't afford. Grown-ups know if you haven't done the work to earn it, it is not yours.
Children do not understand this. They don't have the experience. The money lesson is a particularly tough one for children to learn.
Once learned, however, it drives us to excel and provides the fabric for our very Democracy.
Education can be painful. A lack of education, however, can be deadly.
Time to learn, America.
I'm Witchooo!
Very good, hornblower! While it may not be entirely realistic to ask the gov't to stay out of this mess completely, I'd like to see them show as much restraint as possible and see if the economy can't work itself out...kind of a cleansing, if you know what I mean. Like a bad virus.
In the meantime, if it means that most of the population has to make some pretty big sacrifices in their lives, so be it. It's a wonderful lesson. Like hornblower said, education can be painful, but it's evidenty VERY necessary. Maybe there will be a lot of growing up done. That's usually what happens in the face of a trial in life. Hopefully we learn from our own mistakes.
The worst thing we can do for our children is bail them out whenever the going gets tough. Likewise, for the gov't to continue to send stimulus packages our way probably won't help a lot in any respect. For me, my stimulus check in April was a godsend. I'm raising four kids on my salary alone. But did it help the economy any? Evidently not.
I don't want to see the entire American economy collapse, of course, so I do hope that wisdom is used with the gov't assisting where it's really needed. But on an individual basis, this country will be so much better off in the long run if we learn a little self-control in our daily spending and learn not to live above our means.
Keeping up with the Jones just doesn't work for me anymore!
BTW, great post, Bluto!
Thanks Kim!
"For me, my stimulus check in April was a godsend. I'm raising four kids on my salary alone. But did it help the economy any? Evidently not."
Kim,
Any "godsend" that helps you make viable tax payers out of those kids of yours helps the economy if you ask me.
My limited experience of you tells me those kids are likely to be one helluva boon for our economy as they reach adulthood!
Aw, thanks Bloot!
My kids in particular have had some hard knocks that I certainly never anticipated, but I think they're better people for it. Exactly my point with the economy in general. Sacrifice is a good thing. It makes you stronger.
I went from being an overprotective, coddling mother who did everything for my kids to a mom who wants to see them grow tough enough (mentally) to deal with the disappointments of life. When I saw the effects my own self-pity was having on my kids, I knew I had to change. It's all about attitude. It makes it really hard for me to watch US citizens feeling entitled and deserving of things they haven't had to work for. Maybe things (the economy) had to get to this point in order for some people to wake up. Going from riches to rags isn't the worst thing that can happen to you--in fact, it may be a blessing in disguise!
Oh yeah...I see the gret mystery is now revealed! JK...But I had to smile when I saw your pic in the paper. :)
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