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It's the credit system, stupid
3/9/2009
The focus everywhere is on "the economy," but it is ironic that conservatives are outdoing each other by promising to spend money on "shovel ready" projects, with Stephen Harper seen getting on to a ski-doo after bringing a cheque for a new winter trail. Trouble is this is all missing the point about the real problem facing the economy: credit. People and businesses can't borrow, banks aren't lending and so the real economy, where people buy and sell things from each other, is grinding down.
Until governments around the world fix that problem, and get banks and other financial institutions back into the lending business to consumers and businesses, all the ski trails, back decks and even subway systems won't do the trick. We should worry if governments lose their focus on this.
- Bob Rae's blog
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Comments
true, but
I read the current crisis as a result of the average person becoming dependent on credit to simply function in our society. With Pay Day loans, lines of credit and 'do not pay for 6 months' deals, people were spending more than ever and at some point something had to give. If banks start lending again we are only setting ourselves up for another crisis in a few more years.
The real task, in my opinion, is to return to a social norm where people live within their means, spend responsibly and look to buy locally when it's feasible.
I understand the lure of an easy solution, but at some point we need to work as a country to pull up our pants, accept our mistakes, and work collectively to fix them and learn from them.