Mr. Stern, from the Center for Responsible Lending, said on C-SPAN this week,
"Don't borrow more than you can afford to make payments on the loan".
In testimony before the Banking, Housing and Urban Affairs Committee, chaired by Democrat Chris Dodd, who, along with Democrat Barney Frank, were major culprits in the problem, I heard phrases used like "common sense", "foxes in the chicken coop", "coercive actions" and "where were the regulatory agencies like the Federal Reserve enforcing regulations?" long on the books. Also wise Arthur Levitt said he could not see any company using federal funds (taxpayer funds) to lobby for governmental benefits. Plus talk about the corrupt Fannie and Freddie and their corrupt management, although they hesitated to call those arrogant and wealthy elite, corrupt.
More than a trillion words have been uttered or written as to how we got into this sub-prime mess. How we got there can be simplified, shrewd shysters, greedy millionaires, politicians who were more concerned about re-election than financial stability in the marketplace and in D.C,, greedy people taking advantage of many people who lacked a modicum of common sense, people who "bought" in to the "great American Dream" and who believed that the economy always went UP and that they didn't need "continuing education"; in case they lost their jobs and the need to continue educating themselves all their living days.
In fact, many young people today are convinced they don't need to read more than the headlines and the first paragraph of a news article, the latest news about Hollywood stars, movie ads, their text messages, MSCNB, MTV, and advertising ads.
About 30% don't believe they need and education at all. Another 20% are told by many liberal educators, who, in turn, are told that by liberal college professors, (think "Professor" Bill Ayers, unrepentant Pentagon bomber and friend of Barak's, and that hairbrained Communist professor from Colorado University) that the government owes them quite a bit, from reparation, free medical and health care to home ownership, and being a free world, the right to do as they please. Until they need help, of course. What are they taught about finance, home buying, cooking, home upkeep, a work ethic and responsibility in their homes and in public schools?
Not much, especially if they can't read.
Did I mention a failing public school system, especially in the large and larger cities? Or a lack of enough common sense leaders? and "we want it NOW mentality"?
As to the economy, does it go up? Sure, up and down. Read history, get used to it and don't "bite off more than one can chew".