Comments on: “Access to Credit Means Access to the American Dream” http://paydaypundit.org/2008/09/02/access-to-credit-means-access-to-the-american-dream/ News and Information About The Payday Lending Industry Fri, 18 Jun 2010 21:33:31 -0700 http://wordpress.org/?v=2.9 hourly 1 By: Arthur Ham http://paydaypundit.org/2008/09/02/access-to-credit-means-access-to-the-american-dream/comment-page-1/#comment-1393 Arthur Ham Wed, 03 Sep 2008 01:16:02 +0000 http://paydaypundit.org/?p=1358#comment-1393 <i>Access to Credit Means Access to the American Dream</i> Yes, with that payday loan I'll be able to buy me a house. Once upon a time access to the American Dream also required people to save first and delay gratification. Lenders would only let you borrow money if your credit was good and they assessed your ability to repay. But then came financial deregulation and saving became old fashioned. So did delayed gratification. We were allowed to buy the American Dream even if our credit was lousy and we couldn't afford the price. Lenders stopped asking us to document our capacity to repay. They just charged a premium for not asking. The bubble grew and grew, then it burst. It turns out that we couldn't defy the laws of gravity forever. People figured out all over again why almost every society that has ever existed constrains credit transactions. Experience taught those societies that without limits, bubbles form, debt peons multiply, and creditors take advantage of people who are short sighted and desperate. Access to Credit Means Access to the American Dream

Yes, with that payday loan I’ll be able to buy me a house.

Once upon a time access to the American Dream also required people to save first and delay gratification. Lenders would only let you borrow money if your credit was good and they assessed your ability to repay.

But then came financial deregulation and saving became old fashioned. So did delayed gratification. We were allowed to buy the American Dream even if our credit was lousy and we couldn’t afford the price. Lenders stopped asking us to document our capacity to repay. They just charged a premium for not asking.

The bubble grew and grew, then it burst. It turns out that we couldn’t defy the laws of gravity forever.

People figured out all over again why almost every society that has ever existed constrains credit transactions. Experience taught those societies that without limits, bubbles form, debt peons multiply, and creditors take advantage of people who are short sighted and desperate.

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