Reform America
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Politics & Power

What's new on The American Borders Forum this week? Preview pane at the bottom of the page.

Bad Economies And Personal Responsibility

If you listen to many debates about the economy you are likely to hear people talking about personal responsibility and how much of our current economic situation in America is due to people failing to make responsible choices. Whether the choices were made by borrowers that took out home loans for properties they couldn’t afford or they were made by investment bankers that dealt in overly risky investments there were undoubtedly many choices at the heart of the economic collapse. Economies fail when the economic fundamentals are not sound. The question should be which choices had the greatest negative impact on the fundamentals of the economy. What has been done to hold those who made those choices accountable?

When lenders structure loans of more than double what the borrowers’ incomes can reasonably pay off over the specified terms of the loans they deserve to lose their jobs. The executives that approved the lending underwriting models that allowed those loans also deserve to lose their jobs and bonuses whether they were locked in a contract or not. When they knowingly made decisions that were fiscally unsound they should be considered in breach of their contract and all bonuses and salary should be forfeit.

When a borrower that makes $40,000 a year before taxes takes out a $500,000 loan at 7% interest over 30 years they should expect it to end in foreclosure even in a good economy. They will pay about $1,200,000 for the home if they never refinance. If you do the math, that is their entire current income every year for 30 years. If you assume they get the average 3% cost of living increase every year over that same time period their loan total still amounts to 60% of their gross income which is unsustainable.

As we do the serious work of trying to rebuild our economy we need to make accountability a top priority. Everyone from the first time home buyer to the multi-billionaire CEO needs to be held to the same standard of sense. Looking back is the first step to moving forward. We need to look closely at how we got to where we got and make sure we don’t let it happen again. Congress needs to pass laws outlawing the selling of $500,000 homes to people that make $30,000-40,000 per year. They also need to outlaw the “golden parachute”. Executives need to sink or swim with the companies they lead. If they make bad decisions that hurt the company they need to be held accountable for it, even if it is discovered after they have left the company. Borrowers need to be informed of exactly how their income relates to their debt and educated about responsible borrowing. Lenders need to be held to standards that prevent credit cards from becoming legal loan-sharking.

In the 1930’s America suffered through the “Great Depression”. After it was over lawmakers saw the things that caused the problems and passed laws to protect people from those things happening again. About 60 years later Congress repealed those laws and about a decade after that the same problems that led to the “Great Depression” began to emerge and eventually sank the American economy again into deep recession. The booming 1990’s and early 2000's were very much like the 1920’s. It was the boom before the bust and for many of the same reasons. Many unwise risks made a few people very wealthy and most others suffer greatly a short time later. Hopefully this time we can learn from our mistakes and once again put the rules back in place that hold people accountable for their decisions and prevent them from taking certain actions that are not wise in any time. The pursuit of a “free market” is only intelligent to a point. Freedom without vision is far more dangerous than overly cautious regulation. There is wisdom to the expression “It’s better to be safe than to be sorry.”

Troy Wilson-Ripsom - Staff Writer | Give your feedback on this article. | Click icon to Digg this article



Get Involved

Do you sit and yell at the TV when politicians come on? Do you shake your head sadly whenever you see a homeless veteran? Is that all you tend to do?

It's time to put up or shut up America. We all love to talk about how we could do things better or how we would do it if we were in charge. Well, it's time to put your money where your mouth is. If you can think of it, you can write it down. If you can write it down, you can type it. If you can type it, you can e-mail it and if you can e-mail it, you can send it here.

We at Reform America are committed to giving voice to anyone who wants to put their ideas out there to make our nation a better place. As the readership grows, we are able to take those views to a wider and wider audience. Grassroots campaigns begin with voices speaking out. You have opinions. Voice them. We aren't about conservative or liberal. We aren't about pro-this or anti-that. We're about Americans and the First Amendment. Reform America is about politics by, for and of the people. You are the people. You only need to speak up. America is listening. Send your article to: stories@reform-america.net



Have You Been Downsized Due to Outsourcing?

For several years now we have listened to some within the business community tell us that America can't compete on a global scale unless they send our jobs overseas where they can be done cheaper. The question becomes, if we don't have good paying jobs here, how can we sustain our own economy? We want to hear from you. Have you lost your job? Have you been forced into a lower wage job due to outsourcing? Has outsourcing been a success for you? Did you end up in a better job?

Tell us your story so we can make sure the politicians see how outsourcing really impacts the workers who are backbone of America. Send your story to stories@reform-america.net





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All written items received by Reform America become the sole property of Reform America. Reform America reserves the right to publish or otherwise disseminate (with author acknowledgment noted) the contents of any written materials received by us at our discretion. By sending written materials to Reform America, the author agrees to these terms and holds Reform America harmless for any use of the items they submit. | Views expressed in articles submitted to Reform America by our readers do not necessarily reflect the views of Reform America or its staff.