It’s been said that capitalism is a beast that feeds upon itself. Several articles posted on this site describe just such grisly doings. On one hand, creditors want to be paid off, but on the other they want to extend people more credit. I’d say that on an average I receive at least ten letters per week trying to entice me to sign up for new charge cards, along with checks which the credit card company wants me to use against my existing card.
But what would people do without credit? Big ticket necessities, such as refrigerators, furniture, computers, etc. have to be purchased with a credit card or some other time payment plan; otherwise, the buyer wouldn’t be able to afford them. Coughing up $800+ in cash for a new fridge is no easy chore for a working-class person. Those really big-ticket items, like automobiles must be bought on credit. And people have to buy these things because that’s what keeps the economy humming. Should people stop buying, then all kinds of bad things happen: job losses, business failures, recession.
So, it’s real easy for people to get in over their heads with credit. Miss a payment and some clerk inputs a bad mark against an individual’s credit record. Then it’s usually down hill from there.
The rash of housing foreclosures sweeping the nation is perhaps the most serious credit problem people are facing. But who’s got hundreds of thousands of dollars in cash laying around to pay for a home? People have to get financing and buy the houses on credit.
I should also touch upon one of the saddest, most unjust form of individual credit destruction: the unpaid student loan. There are young people out here who have bad credit, and have never even had any consumer credit. They’re in this situation because they have somehow fallen in bad straits with the student loan people, and owe thousands of dollars. Tracked and trapped again. But these young people were told and taught that getting a college education would put them on the road to prosperity. We all know how many got railroaded down a path to early ruination.
Capitalism: the beast that feeds upon itself, swallowing its tail, then its body, and finally its own head.
What is the way out of the dilemma? There is none. The beast’s constant hunger cannot be satisfied.
Talk about bad loans and those balloon mortgages coming due being the reason for the bottom falling out; or lenders extending mortgages to shaky people. Well, who else were these banks and mortgage brokers going to sell the houses to? Those picture perfect people with the A-1 credit don’t always come knocking on lenders’ doors. It’s people who need a place to live that come knocking. And we know how easy it is to be categorized as a bad credit risk. In some instances, overdue libray fines or a rocky spell with a utility company can mess up an individual’s credit. In this age of computers and information tie-ins, most folks are tracked and trapped at every turn. Gone are the days when a man or woman could pack up and move to another town and get a fresh start in life.
And weren’t these building financiers and contractors going hog wild building these new homes all over the country, outitting them with jacuzzis and numerous lavish extras that the average Joe didn’t really need? Once these houses were built, they had to be sold! So, the rules were bent a little so they could fill these units with people wanting to realize the dream of being a homeowner.