The 700 billion dollar bail out bill passed on Friday, except it is called a financial rescue package. I don’t think it is going to have any immediate impact on our local economy.
It has been harder for home buyers to get mortgages this year than it was last year and I don’t see that changing because of the passage of the bill. I also think it is a good thing that lenders have tightened things up a bit, and I hope it doesn’t change.
Some people are blaming the lenders for this mess, they are a huge part of the problem but I also think consumers need more education on how to use credit. Some would blame the credit industry itself for all the credit card and loan solicitations that are mailed to homes. There are ads on television and on the radio and everywhere for loans of various types.
I would agree that consumers are bombarded with those ads, but why is it that some consumers amass huge amounts of personal debt and others do not? Not everyone takes advantage of the credit cards and the solicitations to refinance. Not everyone who has a credit card has too much credit card debt.
Buying things and having things seems to be a huge part of our culture. We start using credit at a young age. I have met several first time home buyers who have had to wait to buy a home because of the large student loan payments they have. It is possible for students who go to some of the local universities to put their tuition on a credit card. My daughter has a friend who did that, and took out student loans. She now works two jobs to make ends meet.
Don’t get me wrong. Credit is not always a bad thing. If we had not gotten a home loan many years a go I would not be sitting in my home office writing this post. Instead I would be paying an amount that is triple my current mortgage for an apartment with room for an home office. Credit should be used wisely. Just because a lender can loan the money doesn’t mean the borrower should borrow it. That is where each of us has to take some responsibility and use credit wisely.
Oh and lets not forget how the US government uses credit. Each party blames the other for the current financial crisis.
The US National Debt as of this posting 10,275,051,731,157.99