Thread: Credit crisis

Originally Posted by hoglahoo

It comes from the socialist way of thinking that keeps growing in the federal government: if the hard working majority get to have to home, so should everyone else.

I don't think that is the case.
The desire to own a house is both:
-instinctive : it's mine, noone can take it away and I can do with it as I please
-logical : when you paid off your house, you have spent a lot of money, but your house is worth a lot too. If you sell your house, you have lived for free, whereas if you've rent for 20 years, that money is gone.

So I think that people don't need others to make them feel like they want to own a house.
However, that does not mean everybody should feel entitled to the aforementioned 5 bedroom house.
But that while that entitlement may be explainable by what you call socialism, I can ensure you that most people in socialized countries (the people with money anyway) do not feel entitled to theirhouse.

We know we cannot expect to have it for free, and we have to face reality.
Of course there are always moochers who feel that the government should give them everything, but they are definitely not the majority.

Originally Posted by jockeys

But the individuals taking out loans they couldn't afford to pay back are equally culpable.

Jockeys, you and I have had this discussion before in a different context. You put excessive responsibility on the individual for everything but you simply don't know the facts ... For example, 50% of the families that end up in bankruptcy got there because of exorbitant medical bills that they couldn't pay. Of that 50%, 70% had medical insurance that ended up not covering a catastrophic illness. In other words, they did everything right, they were responsible, and still lost everything. When there is an illness in the family (which you don't understand because you're young and are still immortal) or when you lose your job because your company decided to move production overseas (which will never happen to you because you think you'll always be one step ahead of the game) a family can get in financial trouble and it's not their fault. Talented, hardworking people (like me) have lost jobs because they were fifty years old and had a chronic illness (like diabetes) and were costing the company too much money for medical insurance. Totally illegal, but I can guarantee that it happens. When I lost my job, I had a really hard time finding another (because no one wants to hire you when you're too old) and then I found out that I couldn't buy private health insurance at any price. In my state there was a high-risk pool but who can afford $2,000 a month in medical insurance premiums? Now, if you think that you're smart and can avoid these types of problems, then I say more power to you. The problem is, and I hope you never find out, is that, as the general standard of living of everyone around you falls, your standard of living is going to fall too, unless you go hide in a gated, guarded community and never go outside.

Originally Posted by jockeys

I'm not saying the banks are blameless... they are, in fact, guilty as hell.

But the individuals taking out loans they couldn't afford to pay back are equally culpable.

No. Loan sharks don't care about the borrower's capability of repaying a loan. Banks do. The job of preventing people from taking irresponsible loans is the loan officers. Instead, they've been encouraging these types of loans and lying to the borrowers.

Living in a country with good healthcare and employee protection, I could not agree more.
If it hadn't been for the health care, my parents would have been bankrupted by the medical problems of my brother. And yes, the US system is broken very badly.

But while I agree with all of this, this did not change the fact that homeowners are in trouble because of their own actions.
You know in advance what your average medicare costs, so you can factor that into the calculation of what you have left to spend. If you get hit with a disease that isn't covered, then you are still out of luck, but those will hopefully not be the majority of the people.

Originally Posted by Bruno

Living in a country with good healthcare and employee protection, I could not agree more.

The elephant in the living room is globalization, which is pitting poor workers in third-world countries against workers in developed countries. The problem is that no country has enough high-tech, hard-to-export jobs for all its citizens. As global capitalism continues to rape the common man, the standard of living in both United States and Europe is going to fall drastically. Even countries like your's, Bruno, will not be able to resist chipping away at the welfare state until its entirely gone. If you're young enough, you may live to see what's happening in the US happen to Europe, too. But, on the bright side, I won't be around to say I told you so.

Originally Posted by Chimensch

The problem is, and I hope you never find out, is that, as the general standard of living of everyone around you falls, your standard of living is going to fall too, unless you go hide in a gated, guarded community and never go outside.

How does that make someone unable to do what they said they would do? The few people I know who are in trouble with their mortgage payments is because they are unwilling to cut their expenses as their mortgages rise. They still take expensive holidays, buy giant tv's, cars, etc. It's not an issue of mortgage-or-food-but-not-both-this-month. My understanding is that individual responsibility is really the only responsibility that matters

Originally Posted by Chimensch

As global capitalism continues to rape the common man, the standard of living in both United States and Europe is going to fall drastically.

Let the standard of living fall. But don't let government force me to carry you. Let me choose. Freedom is worth it. But then again, I guess there are always safe refuges like China, North Korea, Cuba, the Sudan, etc

Originally Posted by hoglahoo

How does that make someone unable to do what they said they would do? The few people I know who are in trouble with their mortgage payments is because they are unwilling to cut their expenses as their mortgages rise. They still take expensive holidays, buy giant tv's, cars, etc. It's not an issue of mortgage-or-food-but-not-both-this-month. My understanding is that individual responsibility is really the only responsibility that matters


Let the standard of living fall. But don't let government force me to carry you. Let me choose. Freedom is worth it. But then again, I guess there are always safe refuges like China, North Korea, Cuba, the Sudan, etc

What surprises me about all these responses that focus solely on individual responsibility is the total lack of awareness of the structural forces that are conditioning the economic turmoil we are experiencing. When the Tsunami hits the beach, even people who know how to swim will drown.

capitalism isn't a force of nature

Originally Posted by hoglahoo

capitalism isn't a force of nature

But it does require all to act responsibly, including and especially the average Joe!

An old saying comes to mind: "Buyer beware", in other words, know what your getting into!

Here’s the raw truth: The growth we’ve seen over the past few decades wasn’t real! This economic crisis is akin to a balloon that bursts because you blow too much hot air into it. Pretty much all of us--consumer, homeowner, businessperson, and government official alike--have been making bad choices and bad economic decisions. These all started to add up over time. Consumers and businesspeople and investors lost confidence. Some started holding back while others kept steaming ahead. That mysterious entity we call “the economy” or “the market” is really the sum total of countless transactions and trends in which we all play a part. There is no conspiracy; the economic “crisis” functions as an unfortunate but necessary correction of all the gluttony we’ve partaken until now. Time to crash and burn. Let the fire purify. Time to start over with a clean slate, and this time with our eyes open.