| mrstickball said: People are forgetting that the reason we're having all the forclosures is due to too many people getting loans they should not have recieved thanks to the CRA. We had rising housing prices AND increases in the number of homeowners for the past 2 decades. When you increase it above the natural limit through artificial means, there will be problems. The govenrments and the big banks are at fault for this, as well as the stupid people that bought the houses. I have to say this: - It's the governments fault for promising big banks money in case people defaulted, thereby okaying predatory lending, thanks to the Community Reinvestment Act of 1995 and 1999. - It's the banks faults for preying on people, and knowing the assets they held were toxic - It's the people's faults for buying houses that were too big, too costly, and beyond what they could afford. In the end, it's everyone's fault. Not just government, because people bought the houses. It's not just banks, because the government incentivized predatory lending. It's not just the people, because these problems didn't exist till government and banks decided to prey on a higher-than-natural home ownership rate. The fact is, the governments and banks tried to subsidize stupidity. Not everyone can own a home, but they tried to allow it and it's backfired, giving way to a lot of other problems that we're now seeing in the recession. In the end, I think that the people that bought into it are the most at fault. No one put a gun to my parents heads' and told them to buy a house they couldn't afford. Foreclosures should happen because you can't bankroll bad economic practices, which the government is doing. |
While on principle you are right, in reality your reasoning will make things far worse due to the sheer number of foreclosures that have and will continue to happen.
foreclosures in the millions -> banks shutting down -> less money being driven through system -> businesses closing or shrinking by large -> job losses by multitudes of norm -> foreclosures of more homes -> repeat
Unfortunately we cannot dwell on what happened, only on what needs to happen to stop the process from getting worse. That means spending money in the best areas to support the biggest links to ensure money keeps moving and confidence is reestablished.
That's why banks that were already going down were subsidized so healthy banks could buy them and keep their people funded.
That's why the first biggest actions were to stop foreclosures even if the people/banks/government made poor financial decisions in the first place.
That's why the automotive industry is being bailed out as they are crucial point for far too many other markets/companies/people.
It make suck to those of us who did not partake in these poor financial decisions, but it is clearly affecting all of us and will only get worse if we don't help all help fix it.
Only good outcome will be to ensure we don't make the same mistakes and I'm pretty confident that this type of lending practices will not be allowed in the future.
