Friday, May 26, 2006

Learning our Lessons

Not many years after the depression, the solution to addressing the problems of life's financial emergencies was to borrow as illustrated in a movie from 1935 called "Financing the American Family"(Windows Media File). Seems we didn't learn our lesson from the depression. This is our banking system is leveraging its political power, setting the problems we have today in motion. Lending to families to pay off houseold debts, as portrayed in this film, is the solution for them to get out of debt. Are we morons? Borrow money to get out of debt? That is like an alcoholic having a martini to beat his alcohol addiction.

This sounds a lot like the pitch for mortgage loans today. They lend us money to get out of debt, while "responsibly" reminding us to live within our means, we are enabled in our addiction to living beyond our means. This is like giving a drug addict a fix, while telling him to stop using drugs. Then encouraging him to come back for more when he gets into trouble again. "We're here to help.", they say. This paradigm has gotten out of hand, now they issue creditcards to people in bankruptcy. Highschoolers are encouraged to carry creditcards. College students are not grown up unless they have at least one or more creditcards.

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