Spanish Suicides Due to European Economic Crisis
Forbes reports suicides in Spain recently due to the economic crisis. This is sad:
But as I read more of these stories about the how the crisis takes a toll on human beings, it's causing me to re-think some things. For example, we all know that some people - maybe many people - ought not to have taken on debt that they couldn't afford. These folks apparently signed on to mortgages then couldn't make the payments. Did they carefully consider the obligation to pay the mortgage when they signed on? OK, so there's personal responsibility there.
Yet we have to go back to the banks that sold these mortgages. How much due diligence did they perform when selling the mortgages? We know what happened in the U.S. with the sub-prime mess. There was no due diligence performed. Did the same thing occur in Spain?
But beyond what we already know - that some individuals were irresponsible in taking on a mortgage, and banks should not have pushed mortgages on individuals who really couldn't afford them, I wonder if there's a bigger story here? That story has to do with a long history of banks offering credit to individuals, knowing that those individuals would become permanently indebted to them. After all, how often do you hear about people paying off their mortgage anymore. It used to be a big event when someone made their last payment on their mortgage. People would organize a "mortgage burning" party and literally burn the mortgage as everyone celebrated. The idea was that paying off your debt was desirable. Do people think this way anymore? If not, why not? Have we all been convinced that somehow it's perfectly normal to owe money to banks, starting with student loans, extending to needing a mortgage to buy a house. Who benefits from this "new normal"? Not people.
(Click HERE for the rest of the Forbes article.)
The intensification of the financial crisis in Spain, and across Europe, is having very real effects on the lives of people. Beyond the rise in the unemployment rate, widespread foreclosures across Spain have caused at least two suicides over the past few weeks, along with an unsuccessful attempt in the city of Valencia.In January, we briefly reported about how people were freezing in Greece. Now this. Yet we don't hear much about the economic crisis in Europe. It's not big news these days. All we keep hearing is that things are looking up in the U.S.
But as I read more of these stories about the how the crisis takes a toll on human beings, it's causing me to re-think some things. For example, we all know that some people - maybe many people - ought not to have taken on debt that they couldn't afford. These folks apparently signed on to mortgages then couldn't make the payments. Did they carefully consider the obligation to pay the mortgage when they signed on? OK, so there's personal responsibility there.
Yet we have to go back to the banks that sold these mortgages. How much due diligence did they perform when selling the mortgages? We know what happened in the U.S. with the sub-prime mess. There was no due diligence performed. Did the same thing occur in Spain?
But beyond what we already know - that some individuals were irresponsible in taking on a mortgage, and banks should not have pushed mortgages on individuals who really couldn't afford them, I wonder if there's a bigger story here? That story has to do with a long history of banks offering credit to individuals, knowing that those individuals would become permanently indebted to them. After all, how often do you hear about people paying off their mortgage anymore. It used to be a big event when someone made their last payment on their mortgage. People would organize a "mortgage burning" party and literally burn the mortgage as everyone celebrated. The idea was that paying off your debt was desirable. Do people think this way anymore? If not, why not? Have we all been convinced that somehow it's perfectly normal to owe money to banks, starting with student loans, extending to needing a mortgage to buy a house. Who benefits from this "new normal"? Not people.
(Click HERE for the rest of the Forbes article.)
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