It’s too big to hide now and something’s got to be done. It could have been prevented if only greedy lenders had voluntarily regulated themselves. But they didn’t and bad loans were made to borrowers that were either just as greedy, twice as gullible, or both.
In the wake of massive foreclosures, cash dried up as lenders feared to lend. Then our government stepped in with seven hundred big ones. Now auto makers want a piece of the bailout, too. They’re in trouble because they kept producing gas guzzlers as fuel costs soared. Now, even if people wanted to drive them, they can’t get the loans to pay for them.
In order to cut their losses, automotive and financial companies have no choice except to lay off workers. Lacking work, workers have no choice except to default on their car loans and mortgages, thus compounding the problem. The government has no choice except to start bailing.
But where will the government get the money to bail out hurting industries? Why, it will borrow it, of course. It’s been borrowing more times than not for most of the last quarter century.
And how will the government pay back what it’s borrowed? It won’t be through increased tax revenue, since failing industries and unemployed workers don’t pay much tax.
Ill conceived lending practices caused a financial crisis in fewer than ten years. The government’s unchecked borrowing has gone on for far longer. If it takes less than ten years to break the financial sector, I wonder how long it takes to bankrupt a government.