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For example, banks (now, members of Congress like B.Frank) used to decide who was creditworthy when it came to buying houses. Then, Congress stepped in. There were people who wanted to own a home and were denied based on their creditworthiness. Then Congress decided the American Dream is really an American right and created a situation that allowed banks to loan money to borrowers who should not have been buying a home, or should have been more modest in their home buying. I can’t remember how that movie ended, exactly, but I’m pretty sure it wasn’t a happy one.
Spoiler alert: banks are better at determining who is creditworthy than politicians on Capitol Hill. People who are worried about losing their job in six months have no business buying a new car; just as those who bought houses over the past couple of years who couldn’t afford them should have either a) bought more affordable housing or, b) continued to rent.
The problem, at this point, is not credit. The market is operating exactly how it should be in the current economic climate. The problem is the people and the politicians who insist we can spend our way out of this. If you can’t afford something, don’t buy it (yes, Congress, that means you, too!). ! It’s as simple as that. The beauty is, it has always been that simple. The shocker is, no one seems willing to accept this.
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