Quote:
Originally Posted by KSig RC
Isn't the problem really the opposite - that Americans wanted more than they could afford, and extended credit to anyone who wanted it to facilitate this?
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If we were culturally different as a county though, it wouldn't have mattered how much credit was extended. ITA with PeppyGPhiB, it's an economic theory I've long held in fact.
For example, credit companies can (and have) dangle as many money carrots in front of me as they would like, but I still don't bite. Because I am a quality over quantity type of person. I actually enjoy my small, super-low-mortgage house. I could have gotten a loan for about three times what I took, and bought a huge property, but I chose not to.
I'm not saying that I'm better than other people, just different. My conservative spending doesn't put as much cash back into the system. But the cash that it puts in is all real, not credit.
I do think it's similar to the way that culturally we want as much as we can have for as cheap as we can get it. My boss mocks me for spending a few bucks more at the local store instead of going to the bargain discount chain store. But, it makes me happier to spend a few bucks more and support a local business. For the majority of Americans it's just the opposite. That cultural push for bigger, better, cheaper drives the market - it's the demand the meets the supply. Were there no demand for all these extra cheap things that we often don't need anyway (but we want them because they are cheap and because we
want in general), there would not be the supply of credit.
I truly believe that excess demand drives supply far more often than excess supply drives demand.
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