Stopping Home Foreclosures and Loan Failures

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There are two dichotomous problems facing the American economy today. First, how do we stop home foreclosures and, ultimately, loan failures in the country as a whole? Second, how do we encourage the flow of money from the banking industry to the public in order to enable free and aggressive economic growth through spending? It is clear the American economy has grown faster than the individual citizens can pay for. Without the utilization of consumer and industrial credit, continued economic growth will be, at best, slowed and, at worst, entirely stymied. It is not enough to stop the foreclosures alone. If the only goal is to end foreclosures, that can be done with a simple stroke of the pen, and that would almost certainly plunge the world economy into a free fall the likes of which we have never seen. The question is: how do you simultaneously enable families to afford the loans they currently have, and to increase their debt holding capacity? Additionally, we must make it possible the financial industry to mitigate the risks in the housing market that are currently threatening their existence, but also continue to extend themselves to loan more aggressively than they are now. The answer to this is all about risk management. There are no silver bullets, but there are calculated risks. As a country we have got to be willing to take risks. America is founded on the concept of risk. Every major venture from the founding of the colonies, to the Homestead Act has been massive exploitation of risk management. However, as we have found, the body public is not extremely good at taking calculated risks. Too little risk destroys progress and too much risk ruins everything. It is only through well developed calculated risk ... ... middle of paper ... ...this country, one requirement is made of our citizens above all others. That requirement is to work hard to become and to remain educated, informed, and in touch with the issues that surround our nation and our society. This requirement is not being met today. We must strive to better ourselves and our future through education. This education will go great lengths to enable us to continue to out-compete the rest of the world economically. It will enable us to make effective and good decisions about the types of people who lead our government. Most importantly, it will help us to make better decisions about how to lead our own lives and raise our own children so that the government won’t have to do it for us. Then maybe we won’t get into this kind of mess in the first place. After all, “Ignorant people make stupid decisions” – Lieutenant General John C Koziol.

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