A very good summery of the credit problems in the US

[Freddy Figbottom]

I never said the drug industry is innocent. But the individual drug user is responsible for their own choices. The individual drug dealer is responsible for their own choices.


The standard of conduct in a free society is simple. If it harms no one else and you are willing to take responsibility for your actions then it should be legal.

But drug dealing harms others, so too does extending credit you know people cannot pay back. But it does provide an illusion of stability and prosperity, a bubble which can be popped whenever the assholes feel like putting us all into slave labor arrangements.

 

[Cancel3]

But drug dealing harms others, so too does extending credit you know people cannot pay back. But it does provide an illusion of stability and prosperity, a bubble which can be popped whenever the assholes feel like putting us all into slave labor arrangements.

Extending credit to someone who is old enough to make their own decisions, not mentally handicapped, and is not under the influence of drugs or alcohol is perfectly fine.

If the idiot is too stupid to realize that they cannot pay back the loan, then they deserve to lose whatever they have up as collateral.

The idea that we should protect idiots from themselves is what reduces freedoms for the rest of us. If we are going to blame the institutions and forgive the borrowers for their stupidity, what is the benefit of making sound financial choices?

 

[Good Luck]

The FACT is there are predatory lenders out there. Fact is we have relaxed lending regulations too much, and need to reign things in a bit. I already acknowledged that.

But the fact also is there are people out there who are in financial trouble from over extending their credit that can NOT be blamed on predatory practices. The fact is the total PERSONAL debt (personal debt does NOT include mortgages) will soon top 2 trillion dollars. The fact is, on average, people pay between 120% and 250% of the sticker price for medium ticket purchases (Items priced between $500 and $5000) depending on their credit card interest rates and length of time they take to pay off the credit card.

Not all of that is due to the types of lending practices bemoaned in the article. But it is all part of a troublesome bigger picture that the article ignores in favor of blaming the lending industry for the current financial crisis. In ignoring the big picture, the article is WRONG about where the blame lies in our economic woes.

Think about it. $2,000,000,000,000 in debt, at a reasonable interest rate of 6% (a non-predatory, high risk, bitch-about-the-bad-banker rate) means the people of this society are paying $120 BILLION per year just on their personal and revolving credit debt. The real average is quite a bit higher than that. In 2006 we spent over $186 billion on the maintenance of personal debt. And that figure continues to rise. And, no it is NOT due to predatory lending.

Now imagine how much stronger our economy would be if that 186 billion (probaly over 200 billion annually by now) were being used to buy consumer goods instead of being used to pay for borrowing to buy what we were not willing to wait for.

Bottom line: we, as a society, have been in a deficit economy for a LOT longer than can be accounted for by the predatory lending phenomenon. As a society we have continued to outspend our incomes, and have continued to do so at a growing rate. And the only way OUT of the hole we have dug ourselves is to quit finger pointing at the lending industry, MOST (but admittedly not all) of which has been simply reacting reasonably to meet an economic demand, and start THINKING about how we, as a society, need to tone down the materialism about 20 notches on the potentiometer, start paying DOWN our personal debt, and start living within our individual means. Only when we stop behaving like spoiled "gotta have it now" children will we have any chance at all of avoiding the pit fall that eventually hits all deficit economies.

 

[Cancel3]

But drug dealing harms others, so too does extending credit you know people cannot pay back. But it does provide an illusion of stability and prosperity, a bubble which can be popped whenever the assholes feel like putting us all into slave labor arrangements.

Another tidbit of this caught my eye.

"a bubble which can be popped whenever the assholes feel like putting us all into slave labor arrangements"

You get put into slave labor arrangements when you make stupid choices. Make good choices and you won't be in such positions.

 

[Freddy Figbottom]

Extending credit to someone who is old enough to make their own decisions, not mentally handicapped, and is not under the influence of drugs or alcohol is perfectly fine.

If the idiot is too stupid to realize that they cannot pay back the loan, then they deserve to lose whatever they have up as collateral.

Why is there even a credit check process then?

The idea that we should protect idiots from themselves is what reduces freedoms for the rest of us. If we are going to blame the institutions and forgive the borrowers for their stupidity, what is the benefit of making sound financial choices?

So what about when we forgive the institutions who gamble on high credit risks.

Do you agree with congress that corporations should be relieved of the consequences of their bad decisions?

 

[Cancel3]

Why is there even a credit check process then?



So what about when we forgive the institutions who gamble on high credit risks.

Do you agree with congress that corporations should be relieved of the consequences of their bad decisions?

There is a credit check to minimize the risk to depositors or investors.

When a Savings & Loan, or any bank, lends money it is lending the money deposited by its customers. Those customers deserve to have their money protected, while attempting to earn interest.

 

[Freddy Figbottom]

There is a credit check to minimize the risk to depositors or investors.

When a Savings & Loan, or any bank, lends money it is lending the money deposited by its customers. Those customers deserve to have their money protected, while attempting to earn interest.

No. It's lending money created out of thin air based on the joke of fractional reserve lending. That's item one you need to get straight.

After that, what about your concept of trusting individuals over 18 with deciding for themselves what financial burden they can bear? Aren't you contradicting yourself?

 

[Cancel3]

No. It's lending money created out of thin air based on the joke of fractional reserve lending. That's item one you need to get straight.

After that, what about your concept of trusting individuals over 18 with deciding for themselves what financial burden they can bear? Aren't you contradicting yourself?

I never said I trusted anyone. I said that those over 18 should be responsible for their own choices. Obviously an unemployed 20 year old with a history of defaulting on loans should not be allowed to borrow more.

Which brings up another interesting point. I have homework for you. Go find out what percentage of those who received credit councilling or declared bankrupcy got into financial trouble again. These are people who should have learned their limitations. Do a little research and find out how many people who have written off credit card debts have gotten into trouble with credit cards again.

 

[Freddy Figbottom]

I never said I trusted anyone. I said that those over 18 should be responsible for their own choices. Obviously an unemployed 20 year old with a history of defaulting on loans should not be allowed to borrow more.

Which brings up another interesting point. I have homework for you. Go find out what percentage of those who received credit councilling or declared bankrupcy got into financial trouble again. These are people who should have learned their limitations. Do a little research and find out how many people who have written off credit card debts have gotten into trouble with credit cards again.

But the Boards of Ellie May And Bernie Mac Should also have sufficient experience with economic matters. Why cannot they be expected to learn? And why do they deserve unlimited second chances?

 

[Cancel3]

But the Boards of Ellie May And Bernie Mac Should also have sufficient experience with economic matters. Why cannot they be expected to learn? And why do they deserve unlimited second chances?

The difference between the individual consumer and the institutions you name is the impact on our overall economy.

Bailing them out will cost us all. But if you compare the cost of the bailout to the cost of not bailing them out, we are financially better off bailing them out. Or so I have been told. I have not done a great deal of research on the matter.

 

[Freddy Figbottom]

The difference between the individual consumer and the institutions you name is the impact on our overall economy.

But they are adults who should be accountable for their bad decisions.

And additionally protecting all individuals from the impact of their decision would be an even greater benefit to society, since society is composed of indivdiuals. This is according to your logic.

Bailing them out will cost us all. But if you compare the cost of the bailout to the cost of not bailing them out, we are financially better off bailing them out. Or so I have been told. I have not done a great deal of research on the matter.

But letting them fail will only affect the shareholder of the corporation. It seems like you want to spread the impact of poor decisions to society at large. Isn't that bad?

 

[Cancel3]

But they are adults who should be accountable for their bad decisions.

And additionally protecting all individuals from the impact of their decision would be an even greater benefit to society, since society is composed of indivdiuals. This is according to your logic.


But letting them fail will only affect the shareholder of the corporation. It seems like you want to spread the impact of poor decisions to society at large. Isn't that bad?

Personally I have no problem with letting both institutions fail. I am simply stating the reasons why it might be in the best interests of the country ot bail them out.

 

[Freddy Figbottom]

Personally I have no problem with letting both institutions fail. I am simply stating the reasons why it might be in the best interests of the country ot bail them out.

But your willingness to explain seems to dry up when it comes to individuals needing help. Isn't society composed of individuals?

 

[Cancel3]

But your willingness to explain seems to dry up when it comes to individuals needing help. Isn't society composed of individuals?

Yes, society is made up of individuals. But the financial failure of an individual isn't going to cause the financial collapse of tens of thousands of retirement funds. Which is exactly what will happen if Fannie Mae and Freddie Mac are allowed to collapse.

There are plenty of examples of the government doing things for the good of the whole. The ripple effects caused by the collapse of Fannie Mae and Freddie Mac would cause the ruination of many, many people. It would also cause huge harm to the economy. Those in charge of the institutions should be prosecuted, thereby holding them responsible for their actions.

Which falls well within what I have been saying all along.

 

[Topspin]

sometimes recessions or declines are good, clean off the scabs and starting building with the good productive institutions and people. Bailouts are for the Desh's, asshats, and usged's of the world.

 

[Good Luck]

sometimes recessions or declines are good, clean off the scabs and starting building with the good productive institutions and people. Bailouts are for the Desh's, asshats, and usged's of the world.

Something needs to happen to get people to realize the depth of the situation we have been building the last several decades. We cannot continue to depend on an economy built on ever increasing personal debt. Perhaps a medium-big crash now is better than total collapse later.

We need politicians with the guts (and economic knowledge) to get up and say:

"Look people; you need to stop spending on non-necessities until your credit card balances are less than one month's paycheck. Pay off your car loans and drive it for at least a couple more years before getting a new one. Pay off ALL your debts as rapidly as possible until there are none left but your mortgage. Then when you want something, save for it and pay cash."

Of course the fuckers would never get elected, but it would be nice to hear.

 

[uscitizen]

My wife and I were both educated in the public schools in Alabama. They routinely finish at the bottom of most studies regarding money spent and academic achievements.

But we carry zero credit card debt. We have no car payment. They only thing we even considered borrowing for is a mortgage.

I had no classes in finances. But I have sense enough to realize that adding almost 20% to the purchase price of an item just to have it sooner is pure folly.

Yeah but you appear to have a reasonable head on your shoulders and your self esteem does not appear to come from possesions that the media tell you will make you desireable and "someone".

You are not an average American, for which I think you are probably grateful.

 

[uscitizen]

sometimes recessions or declines are good, clean off the scabs and starting building with the good productive institutions and people. Bailouts are for the Desh's, asshats, and usged's of the world.

and for the Chevrons if oil dropped to $30/bbl.

 

[evince]

First, I read the article. It told me nothing I did not already know. It did tell me there is a large faction out there that, as is typical of the direction modern liberalism has been taking, wants to place all the blame on anyone except the individual person (ie: "victim" as the brain dead would have us believe) who fucked up and made a bad decision.

Second, those fees and interest rates were allowed because our economy was so fucked the "old" rate caps made it impossible to lend money without a net loss. Funny how many have completely forgotten the late 70s. Well we STILL face the consequences of that period in time.

Third, it was NOT the lending institutions that convinced anyone they needed more than they can afford. They DID take advantage of the market created by the attitude, but to blame them for creating it is sheer ignorance.

Fourth, high school kids are given the OPPORTUNITY to learn about home finances, but don't have to because they can take underwater basket weaving as an alternate course, and besides, failing them when they ignore what is taught might hurt their feelings.

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH!

Ok now that Im done laughing at your stupid post to defend the very people who crashed our economy by Cheating the system and YES they did convince people to take on the credit. Where have you been, under a rock?
Every store for years would give you gifts and discounts to get a card with them. They had deals for if you used your card to purchase items.


This all happened before in the great depression and the laws that were set up to keep it from happening again were dismantled recently.

Why is it you people refuse to understand the history which is repeting its self?

 

[FUCK THE POLICE]

Yes, society is made up of individuals. But the financial failure of an individual isn't going to cause the financial collapse of tens of thousands of retirement funds. Which is exactly what will happen if Fannie Mae and Freddie Mac are allowed to collapse.

There are plenty of examples of the government doing things for the good of the whole. The ripple effects caused by the collapse of Fannie Mae and Freddie Mac would cause the ruination of many, many people. It would also cause huge harm to the economy. Those in charge of the institutions should be prosecuted, thereby holding them responsible for their actions.

Which falls well within what I have been saying all along.

If they had been properly regulated instead of milked for short term gains we would've never had this happen. And how the hell are you supposed to prosecute someone for failing at business? Utterly retarded. You guys play the blame game too much. Neuroeconomics, my friend. You have to take it into account.