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Reasons for credit crunch in america |
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With the struggling economy many are wondering what the reasons for the credit crunch in America. To make it relatively simple, it can be caused by some careless lending decisions by banks and other lenders. These choices result in the banks and lenders themselves getting further into debt as the poor lending decisions resulted in people being unable to repay what they had borrowed. This reflects in higher interest rates being put forth and more stringent rules implied when it comes to the rules with getting loans or other types of credit. People also are part of the reason for the credit crunch in America. Many people have been living beyond their means for years and when something happens to affect the money that is brought into the household, like a job loss or a lack of cheap insurance, they are unable to make payments to creditors the way they could before. So in essence we are all to blame for the economy being in the state it is in today. We are all guilty parties when we sit down and look at the big picture. If we as consumers had thought about what could happen in the future instead of living beyond our means we
would be far better off. But that is hindsight and something that we neglected to do. People were quick to jump for the credit cards and make high end purchases that they would not have been able to do before the credit cards came along. Then when things start to go amiss they can no longer afford to pay for these items and the costs that were incurred along with them. We have all been guilty of doing this at one point in time or another. All of these things can be considered to be reasons for the credit crunch in America. Who would have thought that the some of the biggest industries would be slammed the way that they have been. No one every dreamt of such things happening, and now that they are upon us people are scrambling about to keep what they have acquired. The job losses are making this increasingly more difficult and people are losing all the things that they value, homes and cars are being taken back by the banks and other lenders at an alarming rate. When it is all put down on paper, we can see that big business all the way down the line to the little guy is responsible for the credit crunch that is being felt in America now. We all need to take responsibility and quit passing the blame. There is not just one reason for the credit crunch in America. With this said there must also be more than one solution to get past it as well.
Credit Crunch
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