Financial Crisis

coins, originally uploaded by Alida's Photos.

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I'm not usually a political person. If you've noticed, I don't write about politics and I try to keep this blog up-beat and positive. 

I'm that kind of person.

What I can't understand is how this "financial crisis" happened without the banks and government knowing in advance.

I knew. I saw it coming for years.

I knew that some people were in trouble when I saw that my co-workers, buying homes for the first time, put very little money down and spent $350,000 for a house, with taxes of $6,000 a year! 

How could they do it? Why did the bank allow it?

The home prices were inflated, and the loans were ridiculously high!

I couldn't do that when I bought my first house in 1979.

We had to put 1/3 down.

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I also knew the banks were lending too much when my charge account statements arrived.

I would receive, (and I still get), blank checks with the ability to receive "cash advances."

With my good credit rating, the approved amounts were very high.

"Just write a check for $20,000 and it's yours!"

I would often say to my husband, "We have to pay this back eventually, right?!"

Well, of course. Nothing is free!

I'm sure there are some people who filled out those blank checks for the full-approved amount. It was too good to be true.

And the banks got the interest!

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Another example:

Mail would arrive at my house, approved credit cards for my two sons.

My sons were in college and had part time jobs, making, if they were lucky, $5,000 a year...just enough for spending money.

The banks sent them credit cards! Pre-approved!

Were they kidding?

How did they expect these college kids to pay back that money?

With college expenses, books, food, gas, car insurance, etc., how could students pay back credit card charges on their own?

I guess I didn't know for sure that we were in trouble as a nation, 

but I had a sinking feeling that the banks and loan companies were just lending out too much money.

Wasn't the "Great Depression" caused by the same lending practices? 

Buying on "margin" which meant buying something on the hope and promise of pay-back and profit?

Did we learn nothing from the past?

It makes me angry that now we, as taxpayers, have to help get the nation back on track.

I followed the rules, bought only what I could afford, and now I will have to bail out the troubled economy.

Who will be there when I need help?

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