As for the new push to open credit, the problem lay not in the expansion of credit, really. At the housing crash/financial crisis core is the for-profit entities HANDLING of the problematic credit. Every sector of private economy has built into it the need to protect itself against potential loss. A certain percentage of credit cards are assumed to be bad debt when issues, and we all pay a higher APR to cover it, for example. Or a store charges us all 10% more or whatever the number is to cover what they know they will lose in shoplifted merchandise. The people issuing suspect mortgages didn't protect themselves nearly enough AND they knowingly sold that bad debt to others and so on and so forth until they exponentially buried the global system under bad debt that was unpaid for. (Similar to the US government and two unfunded wars, by the way.) It wasn't the initial bad loan per se that killed the economy. It was the actions AFTER making the loans that did us in.
Expanding lending in general is essential to our recovery. And banks aren't doing it. There are millions of people who are fine risks for mortgages that aren't getting them because they got caught in the crash through no fault of their own - - lost jobs, no jobs etc that defaulted on student loans in the short term, for example, that have since sorted out their situations but still have that negative report on their credit from five years ago that has no real bearing on their current credit situation. And they aren;t getting loans which is holding up the entire consumer market, especially in housing. They aren't saying go back to $500,000 mortgages to people making minimum wage. There's a difference.
Can't we all just get along and play our games in peace?
