Not the borrowers who knew they shouldn’t qualify for a loan but shopped around until they could get one, skirted the rules, and took out secondary loans for down payments. Nope, not them.
Not the borrowers who stretched to get as much house as they possibly could, opting for the worst possible mortgage conditions so that they could squeeze another few square feet. All the while scoffing at the idiots who rent, reminding them daily of the equity they could be building if only they were smart enough to own.
Certainly not the home owners that begrudgingly sold their run down piece of shit for 3 times its assessed value. Easily covering up the flaws and failures for the next guy.
Not the geniuses that watched HGTV and decided they could make a quick buck buying a house site unseen then “flipping it.” That already had a mortgage they couldn’t afford but decided to get a second house as an “investment.”
Or the brilliant tacticians that realized without any equity in the house there was no reason not to foreclose. The ones that calculated the hit to their credit and concluded it was in their best interest to walk away.
Or the sour grapes that knew they fucked up and decided to stick it to the greedy bankers by putting cement down the drains, destroying the house they should never have owned.
Obviously not the casual, working class, investor that kept his/her money in risky stocks because the market was reaching all time highs. Or the lazy pension fund managers that couldn’t be bothered to do any research beyond what Moody’s said.
And definitely not the politicians, on both sides of the isles, that loved seeing house prices climb. Loved the increased tax revenue. Loved the feeling that comes with helping people get mortgages they shouldn’t get.
Yep it was the bankers. There was a time when you had to put down 20, percent and have a good credit score. So I am sure you can explain what the mechanism was that a borrow used to force bankers to drop the requirements. After all the poor powerless bankers could not help themselves from these terrible all powerful borrowers.
The bankers sold off the mortgages. They had no peril. Just big profits. So they dropped the requirements and made more money. Then packaged and sold them off again. They made more millions. So what did they do? Dropped them even lower after all they had no exposure.
Tell me what part the borrower played in that scenario. They could not force a bank to give them a loan. All the power was in the hands of the bank. The bank encouraged as many people as they could to go far out on a financial limb. They were not out there with them. They had their millions and billions in their pockets.
They ran ads , pounded your computer with sweeter and sweeter offers, called your home phone all day long with easier and easier terms. How did the borrower make the poor defenseless bankers do that?
When people say the blame was on the borrower, they should not enter any discussion on the crisis. They are lost.
So it’s unreasonable to expect a banker to have any expertise on the subject of banking? I guess it’s equally unreasonable to expect an engineer to know how to build anything or a physician to know medicine or an MBA to know business. If you hire one of these people and it turns out they’re a fraud - well, it’s your own fault for believing them when they lied to you. But no problem, you can just sue them in a Libertopian court. You just better hope your lawyer knows something about the law.
OK. then what? Global warming has rendered the Innuit solution moot, there are no ice flows to put our old folks on. So, if the problem is that we cannot afford our old people, whats the answer? Soylent Green Classic? Shove them off on their kids, what makes you think they can afford to if we all can’t?
If the liberal solution is doomed to fail, what’s the Free Market solution?
Do you mean lack of intervention? The reason that the banks didn’t make loans this bad back then was that they mostly owned the loans, and if they started loaning money to people who clearly couldn’t pay they’d be left holding the back. Stick the bad loans in an instrument, put a AAA rating on them, and give them a good yield for risk and the demand skyrockets, encouraging you to sell more bad loans. If you didn’t, you’d be uncompetitive.
Let them die, sneering while you gloat over their suffering and bask in your own imagined superiority. That’s the Free Market Way. Arrogance, selfishness, and malice.
There is of course the fact they were making millions and millions of dollars. They bribed the rating agencies that were a big part of the problem. They were swimming in cash and would make anybody involved rich. There were staggering amounts of money to be made. They would not let anybody stand in their way. The ratings agencies were actually serving as a regulator too. But money made it so they would AAA rate anything the bankers threw at them.
How did the home owner cause this?
What surplus? The “surplus” is a bunch of treasury bonds - which means that all the social security fund has as a future asset is a promise to collect some taxes.
I’m not saying we won’t or shouldn’t collect those taxes but how is this situation any different than if we didn’t have a “surplus”? It’s just that instead of collecting taxes to pay for social security, we’ll collect taxes to pay off treasury bonds and then use that money to pay for social security.
As said, we’ve been through this all before. If I am holding $10,000 of T-bills in my portfolio, that is an asset, not a debt.As for the government, there is no evidence that the debt is any higher because of Social Security. As we draw down the surplus, we are going to have to pay more than we take in, but we’d have to pay if we had sold that debt to ourselves or to the Chinese. If we kept on accumulating a surplus, forever, it would mean we had set SS taxes too high. When my generation dies off the demographic tide will turn.
I have to point out that every dollar you and I have is a promise to pay sometime in the future. On the day the US government can’t or won’t pay their promissory notes Social Security won’t be our biggest problem. The dollar bills in your pocket will be all but worthless, your bank account will be numbers with no value and any other checks, not just SS checks, from the government will be worthless too.
The fact that the government borrows way more money that they take in isn’t the fault of the Social Security system or the Chinese or the little old lady who buys savings bonds. Although I guess you could make a case that they are all enablers of government overspending. Uncle Sam makes pretty much the same promise to everyone who loans him money for one of his drunken spending sprees. “I’ll pay you back next Thursday if you buy me a hamburger today.”
There is a difference between you or I holding ten thousand dollars in T-bills and the United Stated government holding ten thousand dollars in T-bills. A treasury bill is essentially a promise that the United States government owes you some money. That makes it an asset for you or me but not for the United States government.
I agree the debt isn’t any higher because of the trust fund. But my point is that it’s not any lower - there’s no real surplus. Social security in the future will be paid for by taxes we will collect in the future. The money that has supposedly put into the trust fund in the past is gone.
Wrong. You either treat SocSec and the rest of Federal government as a single entity, or you don’t. You can’t have it both ways simultaneously.
If SocSec had taken in $1 billion less than it has, the total Federal debt would be exactly the same as it is now, but SocSec would have an additional $1 billion of unfunded future obligations. Therefore to say that the $1 billion is not part of a surplus, is to claim that $1 billion is zero.’
Taking it in small simple steps is the key to understanding. Let’s start with this: Do you still think that if SocSec traded $1 billion of U.S. debt to Canada for $1 billion of Canadian debt, that each country would now be $1 billion richer?