Is BK good for the economy?

[hereforinfo]

In case you were not informed properly, these banks are not getting bailed out because of the people, it is because of the government. The Clinton administration put hard pressure on the banks to make loans to people that typically would not qualify for a mortgage. The Bush administration did not do anything different to correct this. Now the banks have run out of money because all the bad loans over the past 10 years are catching up to them. The government is using your,,,I mean OUR money to correct a problem that they created as usual!!

That's what started the downward spiral, but all of this was just another unintended consequence to some government intervention (which is why we need smaller government!). The bad loans didn't crash the economy, per se. It was the way the banks had packaged up and sold those bad loans that had the biggest impact. I think it's appalling that no one in the financial industry has been charged with anything in relation to this mess.

[hereforinfo]

I have to add to Momisery

I recall being a kid in the 70s and such that many of my kid friends Mom's stayed home and the Dad's worked 40hr jobs and we all had food, clothes, Nice (not always new) cars and decent homes for the times... now today the past two decades for sure the cost of things have gone through the Roof as well as the costs to properly insure your assets and your lifes work... I agree with Two good incomes today you simply can't afford to live even simple means as we did just a short time ago.... I remember when there was small Mom/Pa shops all over the place selling daily goods familys used... and often times a line of credit could be had...paid monthly. Extremely rare nowadays.

In the 70's the average square foot of a single family home was 1600. In 2008 it was 2500. Cars have a lot more functionality and improvements in them now than they did in the 70's. Technology has grown by leaps and bounds and everyone wants more of everything - several flat screen tv's, ipods, cell phones, computers, high speed internet, wireless routers, cable or satellite, surround sound, Wii, dvd players in the house and in the car, etc. People give all of the above to their kids as well. The cost of healthcare has skyrocketed. All of that stuff costs money. Everything is bigger and better and that's why it now takes 2 incomes to support what most of us have come to consider necessities - the list of things that everyone feels they must have is much longer than it was in the 70's when all you needed was a home, one tv with some rabbit ears, a record player, and a basic car with a cb radio.

[Rahaton]

Thanks for your post MS. I respectfully disagree with you completely.

1. Is shoplifting OK with the shop owner? Is shoplifting OK with the customers who do not steal?

Again, can I borrow $100,000 from you?

Do unto others as you would have them do unto you.

Um neither a borrower or a lender be? I assume you also know that biblically all debts are discharged after 7 years?

One of the things that you are missing sigferl is that the intent is different. In your shoplifting example and your silly request to borrow $100,000 you have no intention of paying the money back. In that case you are committing fraud and that is illegal and not dischargeable in bankruptcy.

So where does that leave you? You need to address the real situation if bankruptcy in the real world if you want to do more the sound like a troll.

[MyStimulus]

My tax money is going to banks that are getting bailed out because people are not paying their bills or their mortgages. Fannine and Freddie are costing me lots of money.

In case you were not informed properly, these banks are not getting bailed out because of the people, it is because of the government. The Clinton administration put hard pressure on the banks to make loans to people that typically would not qualify for a mortgage. The Bush administration did not do anything different to correct this. Now the banks have run out of money because all the bad loans over the past 10 years are catching up to them. The government is using your,,,I mean OUR money to correct a problem that they created as usual!! All the CEO's are still cashing in big and you are pissed at us who have had circumstances beyond our control. I had perfect mortgage history for the past 15 years, divorced my wife, and now the economy is in the tank. I am faced with no other choice due to things I could not control. I am soooooo glad that I did not grow up Liberal!!! By the way, if they did not use our money to bail out banks, do you really think it would not have been used for something else that you obviously would disagree with. Government is too strong and your money will get spent without your say for as long as we keep electing the wrong people. Just my $0.02<----this is what I will have left after BK...What an abuser I am!

[sigferl]

Thanks for your post MS. I think Jefferson was talking about hones debt and not BK abuse caused by laziness and materialism in the 'land of opportunity'.


[QUOTE=MSbklawyer;330485]Thomas Jefferson's letter to Sam Kercheval seems apt.


Thomas Jefferson to Samuel Kercheval, 1816. ME 15:39

[sigferl]

Thanks for your post MS. I respectfully disagree with you completely.

1. Is shoplifting OK with the shop owner? Is shoplifting OK with the customers who do not steal?

Ok with whom?

Banks have to charge high interest for risky loans to people that are likely to not repay the loans. Why is my loan interest low? Banks want you to repay your loans on time.

It makes them insanely jealous, that's the impact it has. While they are running on your loan shark interest treadmill trying to dig out from under an impossible debt load, the people who have escaped have gone on with their lives.

Why do you borrow money if you do not like the interest rate?

Because I was having too much fun running it up the loan shark's a**** long, hard and deep. That's why.

I have not read one story from any economists that states that personal BK is good for anybody except the person that filed.

He may yet. He's only been there about 9 months. And like I said, I don't think bankruptcy does help the overall economy. But then again, neither does usurious interest rates or people losing their homes because they incurred catastrophic medical bills that they have no hope of paying.

Again, can I borrow $100,000 from you?

Do unto others as you would have them do unto you.

[MSbklawyer]

Thomas Jefferson's letter to Sam Kercheval seems apt.

"To preserve [the] independence [of the people,] we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers." –

Thomas Jefferson to Samuel Kercheval, 1816. ME 15:39

[quote]

[MSbklawyer]

Thanks for your post MS. I have a few questions.

If not paying for items is OK, is shoplifting OK?

Ok with whom?

What impact does BK have on those that never file BK?

It makes them insanely jealous, that's the impact it has. While they are running on your loan shark interest treadmill trying to dig out from under an impossible debt load, the people who have escaped have gone on with their lives.

Why did the government make BK harder in 2005

Because I was having too much fun running it up the loan shark's a**** long, hard and deep. That's why.

and why didn't Obama make it easier to file BK to help cure the recession?

He may yet. He's only been there about 9 months. And like I said, I don't think bankruptcy does help the overall economy. But then again, neither does usurious interest rates or people losing their homes because they incurred catastrophic medical bills that they have no hope of paying.

[sigferl]

Thanks for your post JP. I also remember much smaller houses, free TV if any TV, very few cloths, very large gardens.

I also remember people working much harder then they do today, back then a larger portion of the work was at home tending the garden, painting house(no vinyl siding), reparing cars/appliances.

Freedom is not free.

I have to add to Momisery

I recall being a kid in the 70s and such that many of my kid friends Mom's stayed home and the Dad's worked 40hr jobs and we all had food, clothes, Nice (not always new) cars and decent homes for the times... now today the past two decades for sure the cost of things have gone through the Roof as well as the costs to properly insure your assets and your lifes work... I agree with Two good incomes today you simply can't afford to live even simple means as we did just a short time ago.... I remember when there was small Mom/Pa shops all over the place selling daily goods familys used... and often times a line of credit could be had...paid monthly. Extremely rare nowadays.

[sigferl]

Thanks for your post MS. I have a few questions.

If not paying for items is OK, is shoplifting OK?

What impact does BK have on those that never file BK?

Why did the government make BK harder in 2005 and why didn't Obama make it easier to file BK to help cure the recession?

PS. Can I borrow $100,000 from you?

God Bless America

It's dollar effect on the economy is neutral. No money or wealth is created or destroyed by the bankruptcy.

However, it does free up people to be productive again instead of having to hide from creditors and try to find jobs that pay under the table. They are back in the mainstream economy again. In that sense, it is good for the economy.

[MSbklawyer]

It's dollar effect on the economy is neutral. No money or wealth is created or destroyed by the bankruptcy. For every dollar of net worth increase that the debtor gets in the discharge, the creditors suffer, dollar for dollar, a loss in their net worth.

However, it does free up people to be productive again instead of having to hide from creditors and try to find jobs that pay under the table. They are back in the mainstream economy again. In that sense, it is good for the economy.

[walkthaplank]

BK IS good for the economy in a macro sense. It is the checks and balance of the financial industry. Where it starts being a problem is when the government starts bailing out lenders with poor lending practices. All of the big banks right now should also be filing BK with the loans and unsecured credit issued over the last decade.

So yes vote libertarian and keep the government from bailing out lenders who knowingly make bad loans.

[mgmadara]

(yawn) I know this horse is dead, but isn't it decomposed by now?

It's never going die until we all start ignoring the troll.

[JoePlumber]

recalling the day...

I have to add to Momisery

I recall being a kid in the 70s and such that many of my kid friends Mom's stayed home and the Dad's worked 40hr jobs and we all had food, clothes, Nice (not always new) cars and decent homes for the times... now today the past two decades for sure the cost of things have gone through the Roof as well as the costs to properly insure your assets and your lifes work... I agree with Two good incomes today you simply can't afford to live even simple means as we did just a short time ago.... I remember when there was small Mom/Pa shops all over the place selling daily goods familys used... and often times a line of credit could be had...paid monthly. Extremely rare nowadays.

[Ifonly]

(yawn) I know this horse is dead, but isn't it decomposed by now?