I was listening to NPR again and, as usual, I'm confused. This time, I'm confused about the economy. Part of the solution being proposed by the experts is to put more money into the system to loosen up the credit markets....so people will borrow more.
I thought the problems began in the first place because people were buying homes they couldn't possibly afford, spending more than my monthly mortgage on a pair of shoes or a purse and buying cars with all the bells and whistles even though it was way outside their budget.
Now that their credit cards are maxed out and the houses are being taken back, the economy is suffering because people aren't buying things they can't afford. Being a responsible consumer is bad for the economy?
Banks and credit card companies are rightfully denying loans and lowering credit card limits, which they should have been doing all along. If people don't have enough sense to do a little simple math ("I make this much money, ergo I can afford to spend that much money"), someone has to draw the line somewhere and not loan money for nonessential purposes or extend credit for luxury items to people who can't afford it. To do otherwise is criminal.
How is opening up the credit market so people can once again spend more than they earn going to make things all better?