Quote:
Originally Posted by David70
If the government doesn't allow me to waste my money on things I shouldn't buy then I will be better off for it? Some group in the government decides what the people can afford and tells BMW when to give loans and when not to? That's pretty much it?
The U.S. subprime loan problem happened because companies could lend money to people that couldn't afford the loans and then sell them to other companies claiming they were good loans. If they had been required to hold the loans they wouldn't have made the bad loans in the first place. It's self regulating if you have to hold the loans and won't be bailed out.
|
Unfortunately some of us are not smart and are taken advantage of, so if the government provides some sort of protection by regulation, then the better for it. Heck even the smart ones can be defrauded. For example if we never had protection against fraudulent use on our credit cards, then we'd be in trouble ;-). About the subprimes, a simple law would have protected these people, and ultimately the rest of the US taxpayers, from not allowing them to access those loans because of their credit situation... we can debate capitalism forever, but the fact is historically hard capitalism is a flawed system as the great depression, the dot com crash and GFC have proved: too much greed always end up badly.