The Government's not interested in seeing you pay down debt...
I guess I'm naive. I would have thought encouraging people to save and pay down debt would make the most sense in a recession. But apparently I don't get it.
One of the government's subsidy/bailout programs is TALF. As explained in the 3/14 Wall Street Journal, "The Fed's main goal in forming the TALF is to bring to life the asset-backed securities market that effectively subsidizes loans to consumers and businesses to buy cars, pay for their educations, buy farm equipment or use credit cards."
In other words, the government's trying to encourage people to take on more debt.
There's no doubt that a growing economy needs a functioning banking system that can lend money to worthy borrowers so that they can expand their healthy businesses. But look at the other purposes for the TALF: "loans to consumers...to buy cars, pay for their educations, buy farm equipment or use credit cards."
Except for the farm equipment, the rest of this has to do with consumer loans. Many people already have too much debt. Why do we want them to borrow more? Even if we're not encouraging the already overly indebted to borrow, why do we want those without too much debt to borrow?
Let's take education. Why should getting an education require getting into debt? When did that "mentality" take over? No one I knew borrowed to go to college. Maybe some did to go to law school or med school, perhaps even grad school. But undergrad? Never heard of it. Now it's assumed (by some, maybe many) that you borrow to go to college.
Same thing for cars. And as for the use of credit cards, you mean we're using taxpayer money to allow people to use their credit cards more?
The solution to too much debt isn't more debt. It's time to learn the right lessons from the bursting of this giant credit bubble. And the lesson is that we had too much credit. This isn't rocket science.
One of the government's subsidy/bailout programs is TALF. As explained in the 3/14 Wall Street Journal, "The Fed's main goal in forming the TALF is to bring to life the asset-backed securities market that effectively subsidizes loans to consumers and businesses to buy cars, pay for their educations, buy farm equipment or use credit cards."
In other words, the government's trying to encourage people to take on more debt.
There's no doubt that a growing economy needs a functioning banking system that can lend money to worthy borrowers so that they can expand their healthy businesses. But look at the other purposes for the TALF: "loans to consumers...to buy cars, pay for their educations, buy farm equipment or use credit cards."
Except for the farm equipment, the rest of this has to do with consumer loans. Many people already have too much debt. Why do we want them to borrow more? Even if we're not encouraging the already overly indebted to borrow, why do we want those without too much debt to borrow?
Let's take education. Why should getting an education require getting into debt? When did that "mentality" take over? No one I knew borrowed to go to college. Maybe some did to go to law school or med school, perhaps even grad school. But undergrad? Never heard of it. Now it's assumed (by some, maybe many) that you borrow to go to college.
Same thing for cars. And as for the use of credit cards, you mean we're using taxpayer money to allow people to use their credit cards more?
The solution to too much debt isn't more debt. It's time to learn the right lessons from the bursting of this giant credit bubble. And the lesson is that we had too much credit. This isn't rocket science.
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