The main reason that large corporations are in dire need of money is simple, greed. Financial institutions went out and found people who wanted to purchase a house, but couldn’t afford it, because of bad credit reports, debt, income, etc. So the banks went out on a limb with these risky people, and loaned them “x” amount for the house. Banks were only trying to make some money off of the outrageous interest rates of the mortgages, because that’s what banks do, they make money. Now banks and other lenders did this type of business on a large scale. People loved the idea that they could go out and get a mortgage on let’s say a four hundred thousand dollar house, with a bad credit score and slightly above minimum wage salary. Can you see where this type of reckless money management is heading?
Now I don’t know about you, but I learned from a very early age that you have to live within your means. That means I only spend as much money as I have. If I can’t afford that new video game, I don’t get it until I have the money that is needed to purchase it. I have heard my mom tell the story of a girl who came into my mom’s office and said that she thought that she had more money in the bank, because she still had blank checks in her check book. Also I have to take into account a portion of my earned wages for my monthly uncontrollable operating cost, such as tithing, gas, and food. So basically if I do not have enough money right now to get something or do something, I will just go without that particular good until I have enough.
This is what I think is wrong with Americans today, it is all about me, me, me, me, me. We have allowed ourselves to develop this idea that if we don’t wear the right kind of clothes, or drive the right kind of car, or live in the right kind of house that we will be banished from society. So we will go out and spend outrageous sums of money just so that we will be in style and look cool on the outside, but in reality we are poor and just barely scrapping by each pay period. It is really sad that some people would rather be fashionable and in debt, than be unfashionable and without debt, just because of what society looks like. People have to realize that somewhere along the lines one has to draw the line and decide whether or not this month they would rather eat have a shelter or whether or not they would rather go out and buy that new pocketbook that is in style.
Patrick wrote an article “The 2008 Financial Crisis-Causes and Effects” that explains a little about how the economy works and why the economy is where it is currently. “The American economy is built on credit” (Patrick). Now credit can be a good thing when it is used wisely, because that is how people start a business or buy a vehicle. Its sort of like trust, I guess is how I would put it. Meaning that when you go purchase something on a credit card or write a check, money is withdrawn from your account and now you have a deficit of sorts. So when you make your...