Economically Speaking

The economy is in dire straits. Home foreclosures and job loss are all-time highs. Ultimately, we turn to our government to fix these woes. The American people demand change and accountability to the companies that we as tax payers have bailed out. However, is this not a double standard? After all, consumers have inevitably contributed to the economic crisis that we now face. This is not to suggest that the unearned bonuses, private jets, and ridiculously high pay of executives in this country is excusable. I am merely pointing to the fact, that we have also helped contribute to our own demise.

This can be seen in the number of foreclosures enveloping all around the country. Home sales had been at an all time high, enabling almost anyone to get a home loan. The warning signs were there, we just didn't heed them. In an effort to reach the "American Dream," we continued to buy and purchase the things that we could not afford. We live in a land where bigger is better and did not use common sense or good judgment. We continued to buy instead. Those who could not afford a monthly mortgage where approved to buy homes. There are two major problems with this.

First, there is the issue of business practice. Banks knew that they were taking a risk. They foolishly assumed since the housing market was soaring that they could always reclaim properties that were being sold and still make a good profit. Thus, consumers who otherwise could not afford a home loan were approved. Other shady lending practices included the varying interest rates on these same loans. From this perspective, we can see how the banks had directly put themselves into this position with their greed.

My second issue is that we bought these homes knowing that we could not afford them. Generally speaking, a home loan is usually considered to be "good" debt. A home loan is almost necessary, only a very small few in the populace could purchase a home with cash. I find it rather irate that some would buy a home that is not within their means though. When some home buyer's took out these mortgages, they knew that they would struggle to make these payments, relying solely on overtime to make ends meet. They didn't intend or know that they were going to become unemployed. Still, they were irresponsible in their actions.

My point is then this, we are just as much to blame for the decline in the economy as these giant corporations, only on a smaller scale. Don't get me wrong, I am sure that some of those facing foreclosure are not to blame. If the company you work for scales back or goes overseas, there is not much the employee can do about it. However, there are a number of people who did not have the resources to be purchasing these homes to begin with. The banks shouldn't have extended credit to these people, but they never should have entered into a binding agreement to pay for something they could not afford. As my grandmother always told me, "don't live in front of your purse".