Our biggest social problem.....

[VeeDubb]

credit is not a bad thing in itself. In fact, you can't have any industry without well functioning credit markets. You also can't have investment and retirement.

The problem is loose credit. The traditional lender-borrow relationship required the lender to do considerable due-diligence on the borrow and then only loan in limited quantities. With the advent of securitization, it all changed. The lender has no incentive to do due diligence because they can turn around and buy a credit swap to ensure against borrower default or to sell the loan to some poor unsuspecting sucker by packaging the loan in an OTC derivative. So what incentive do lender's have now of monitoring a borrower? Zero.

 

[Shannow]

Excellent point.

Particularly with an asset(?) as security, there's a sort of double edged insurance policy against default...unless the security fails also, when too many people play the same game.

But as you said, there's safety nets beyond that.

 

[TooManyWheels]

I suggest that this is actually our biggest social problem.

 

[SD26]

Yeah, stupidity. Or accountability for stupidity.

 

[Gary Allan]

Originally Posted By: SD26
Yeah, stupidity. Or accountability for stupidity.
'


Perhaps so, but this, again, comes back to our fine shepherds that are allegedly there to safeguard our way of life. Now they're obviously not responsible for stupid people doing stupid things. They are responsible for guardianship of the integrity of the nation. They've abandoned this task and sold it out for the greater good of a very few ..to the loss of the many and the further decay of our great nation.

I still say that any action or inaction that ultimately hurts the nation is treasonous and criminal. The fact that no one prosecutes is inconsequential. They can wait for the inquisition/revolution to get their due. "Let them eat cake".

 

[TooManyWheels]

Gary, I should have been more clear. I am in the camp that holds the leaders/managers of a system as primarily responsible for the outcome of that system, whether that system be a society, a government, a corporation, whatever. He who controls the system is responsible for the results.

On the other hand, it is a cyclical process. The governed have the capacity to change the governors (at least in theory, although the governors rig the system to discourage this), so the governed can effect the system by becoming a whole lot smarter about who they put into power. The problem is that for them to make a course correction they are fighting an uphill battle against a now-established power structure. Intelligence can be interjected at any point in the process. Unfortunately, it takes a long time for late-blooming intelligence to override the long-term effects of early stupidity.

In a freeze-frame viewpoint, only the leaders are responsible. In a continuous-process viewpoint, everyone is responsible.

 

[NJC]

Staggering numbers ... is David Walker going to have to some family members disappearing soon for his outspoken views? More on him:

http://www.gao.gov/cghome/dwbiog.html

So the US needs to do something NOW, according to David. I'd like to hear an official plan on regaining financial responsibility - it needs to be top down leadership. And I believe it could be done, given decent leadership who could rally the American public to support the painful financial restructuring.

 

[Papa Bear]

The guy has been in office 10 yrs ... he is just now coming to his senses.

 

[Tempest]

Quote:
If the private sector had trust funds like the Gov. has trust funds, someone would be going to jail.


And people want even more Gov. programs controlling their lives. Simply amazing.

"The Gov. has abilities that private corporations don't. They can tax."

And that happens at the muzzle of the IRS. Something people should not forget. Everything the Gov. does is at gun point to it's population.

 

[Gary Allan]

I guess we might as well leave it in this dysfunctional state.

Good thinking!