“The legislation is like this: some boats are sinking, so rather than bailing those boats out, you blow up the dam and drain the whole lake,” says economist John Cochrane in this article on the fact economists don’t quite buy the idea of a coming financial armageddon.
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I’m becoming increasingly concerned, not about the ruin of the financial system because of bank failures but about the ruin of the economy because of higher taxation. “Patriotic” my left toe …
What? You mean it’s not patriotic to bleed the country for one’s own gain? What’s wrong with you!?!?!?
Seriously, this measure adds to the public debt. At some point I expect we’ll see huge inflation when the debt becomes too heavy to carry.
Did I mention my mortgage is not adjustable rate, BTW?
Mine isn’t either. I heard a democratic adviser say people were coming up to him saying they were having trouble, even with student loans. I don’t understand how that could be, unless perhaps they were trying to get student loans. Still, I heard four or more people on the radio yesterday say they did or could get the loans they needed from their banks. One man said he just received $30k unrestricted simply by meeting the qualifications. This morning on Brian and the Judge, someone said we were definitely in a crisis because everyone’s 401k has gone down. Flux in the stock market is not the financial crisis! I honestly feel unrepresented and lied to by the press and congressional leaders, though I don’t think everyone up there knows the situation perfectly and is spinning it to us uniformly. There’s lots of confusion to spread around.
People are having more trouble borrowing money. Banks are actually scrutinizing them to see if they would be able to repay. Many people have forgotten that credit is not a right, it’s a gamble you need to convince somebody else to take on you.
Does it suck for some people who need loans to go to college and can’t do it right now? Yes. They might need to work for a year or two, and try again when credit loosens up and they have a history to show they are good credit risks. But that’s not the end of the world, or even something that will keep them mired in poverty for life.
I suspect most 401k money is a chimera anyway. Retirement, as we’ve known it, is going to go away because of the changing demographics. The economy won’t be able to handle everybody retiring at 65 or 70, so the inflation-adjusted value of assets that are primarily held as retirement assets will go down. I suspect that will include the stock market.
“Credit is not a right.” I like that. It should be inscribed over the entrance to every bank. And on the forehead of every congressman.