World Economy: The great implosion
- Thread starter 2-0-Sixx
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Yes, you can't blame the people, because they were born and raised with this mindset. But there are several very simple things one can do not to be in debt for the rest of his life. For example, you can stay and live with your parents (even if you have a family) until you can buy your own house or they die. Then you won't have a mortgage. That's the way it's done in many other countries and it would be even easier here with the McMansions.
Houses wouldn't cost $300,000+ if mortgages didn't exist.
The easier it is to obtain money the less value it has. That is why when the Fed lowers interest rates inflation increases.
The house market is also influenced by a secondary source of inflation, which is created by the ability to get a mortgage on a house. The easier it is to obtain a mortgage for a house, the less value the mortgage dollars have, and the more housing prices increase.
That is one of the specific reasons why we have seen such abnormal rapid appreciation of housing recently. Not because houses were actually going up that much in value, but rather because it was becoming easier and easier to obtain mortgages.
If everyone had to pay full asking price in cash, houses would be much cheaper than they are now. If everyone had to pay 0 down with 1% interest, housing prices would be much higher than they are now.
This particular bubble can all be traced back to the Community Reinvestment Act of 1977, but who whole concept of credit and lending in general goes back much, much further.
I agree with this. However, the problem goes back to lifestyle choices and american culture. I think synical dj made a thread about living with parents, and if you didn't read it you probably should. americans have this fanciful idea that people should move out from the home, be independent and all this other stuff. However, when you study a lot of other cultures who have been economically successful, you'll see a pattern where the young adults don't move out of the home, or move away but still stay close to home.
Now here is where I'll introduce religion, more specifically 'american christianity' (in a general and broad sense) to this thread. american christiany has set a lot of people up for the downfall when it comes to finances. I won't get into tithing and all of that, but I will go into something else. Now, according to the bible, people should leave the home when it is time to marry. If you weren't getting married, you typically stayed at home with the parents for however long you did.
Regardless if you believe in the bible and want to wipe your ass with it, you'll see a very common theme of staying with the family. However, american christians have ultimately destroyed this by creating 'singles ministries' and preaching sermons that make young people who live together feel bad. They tell them they are living in sin if they live together (some debate can be made for and against this), and the problem is these people end up marrying, divorcing years later and end up in debt as marriage is also a financial institution.
So instead of telling these people to stay at home or go back home, which according to the bible is the right thing to do, they say "Get married now!"
Now here is where I'll introduce religion, more specifically 'american christianity' (in a general and broad sense) to this thread. american christiany has set a lot of people up for the downfall when it comes to finances. I won't get into tithing and all of that, but I will go into something else. Now, according to the bible, people should leave the home when it is time to marry. If you weren't getting married, you typically stayed at home with the parents for however long you did.
Regardless if you believe in the bible and want to wipe your ass with it, you'll see a very common theme of staying with the family. However, american christians have ultimately destroyed this by creating 'singles ministries' and preaching sermons that make young people who live together feel bad. They tell them they are living in sin if they live together (some debate can be made for and against this), and the problem is these people end up marrying, divorcing years later and end up in debt as marriage is also a financial institution.
So instead of telling these people to stay at home or go back home, which according to the bible is the right thing to do, they say "Get married now!"
heres my take-
every generation i feel is pushed further away from not only learning how to aquire financial stability i.e. home, money, cars but the foundation so to speak of sound business decisions doesnt seem to really apply so much with modern society as we know it as well as our environment around us and aquiring a loan in order to buy a home is more difficult not to mention there is more cost associated with homes of today versus homes of long ago. because of such shady business dealing of 89 it has caused such red tape in our current affairs. banks want full docs rather then partial and credit has become easier to obtain causing many americans to downfall in financial turmoil. so you see, event simple things that can be done to avoid financial burdon are not because people of today arent really raised as business is part of their daily way of life n how it opperates n what not to do, so on..people of yesterday took more of a interest in money investments, housing markets n so on....a small few know how to invest money, what property would increase n when to buy
every generation i feel is pushed further away from not only learning how to aquire financial stability i.e. home, money, cars but the foundation so to speak of sound business decisions doesnt seem to really apply so much with modern society as we know it as well as our environment around us and aquiring a loan in order to buy a home is more difficult not to mention there is more cost associated with homes of today versus homes of long ago. because of such shady business dealing of 89 it has caused such red tape in our current affairs. banks want full docs rather then partial and credit has become easier to obtain causing many americans to downfall in financial turmoil. so you see, event simple things that can be done to avoid financial burdon are not because people of today arent really raised as business is part of their daily way of life n how it opperates n what not to do, so on..people of yesterday took more of a interest in money investments, housing markets n so on....a small few know how to invest money, what property would increase n when to buy
This practice is even more successful in countries that aren't that well economically. It's also the educational effect on the next generations that has to be considered. Because, if you have grandparents taking care of the children, the children get paid a lot more attention than they would be otherwise (and you don't pay for baby sitters), traditional culture gets preserved much better, and in general, society is much more stable
That's an interesting idea that I haven't thought about, but it sounds very logical
That's an interesting idea that I haven't thought about, but it sounds very logical