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Not to mention that the credit market is frozen so there is no credit going out.. want to buy a house? Oh well. Want to sell a house? As if it weren't hard enough already? Sorry, your buyers can't get a loan because there is no money to loan. New car? Hope you have $24,000 in cash to pay for it because there is no money to loan
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It's not just cars and homes. In the business world, companies use credit to purchase capital machinery, buy inventory, invest in research and development, etc. The credit crisis is going to effect us all. Don't think you will be immune.
In the last 3 days 5 banks worldwide have failed. The panic is GLOBAL, and something must be done to help shore up confidence. European countries have been stepping in and injecting money into their banking system. The US, the largest economy, unfortunately is going to have to as well.
Small example:
My company sells capital machinery in the chemical and plastics industry. The companies that buy from us use credit to buy the machines (most companies don't have $100,000 laying around not being used). With banks not lending money, few capital expenditures will be made. My company will go under; I, and my co-employees will lose our jobs. The companies we represent will be unable to sell their product, they will go under, hundreds will lose their jobs.
This is not just a "bail out" of Wall Street fat cats, this is a problem for us all. It's just a matter of time when you, your family, your neighbors will be hit. I wish so much it weren't so, but it is and we'll be paying for it for a long time, one way or another.
This has been a long time coming. There have been warning signs for years, and our government (and we) have kept our heads in the sand, writing checks that we couldn't afford to cash.
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