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Will Wall Street Woes Affect The RR Industry?
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[quote user="Samantha"] <p> </p><p>The problems on Wall Street are driven in large part by a systemic issue in the American economy. Too many people have been living beyond their means for too long, i.e. over using credit to fund their lifestyles while saving little or nothing. And too many lenders gave them the money without determining how they would pay it back. To be sure there is plenty of blame to go around. Most people want to place the blame on everyone but themselves. But in a sense we are all party to the problem. </p><p>[/quote]</p><p>People may be using credit, but normally, using credit does not mean that one is living beyond his or her means. Credit and the ability to service the loan is part of one's means. In any case, I see no connection with people spending their own money and the current housing crisis. When lenders gave them money without knowing how they would pay it back, it was because the lenders did not care if they paid it back. There was a government agenda to loan money to people who would otherwise be denied loans by prudent lenders because those people were unlikely to be able to pay the loans back. </p><p>Ultimately, the government guaranteed those loans with our (the taxpayers') money. The government made us taxpayers co-sign those bad loans without our knowledge. This did indeed create a credit bubble, and there were other players such as loan originators and appraisers who added to the problem. But government policy set this into motion with what amounted to socialized housing through the back door by their control of Freddie and Fannie. Naturally they are not pointing fingers at everyone but themselves, and it might be confusing with so many entities being blamed. But despite the fact that so many are being blamed, it is an error to believe that many are to blame for this, or worse yet, that we are all to blame for this. Those at fault would love us to believe that. </p>
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