Tuesday, October 05, 2010

Credit is damaging

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October 5, 2010

Credit is damaging

Nearly 9 million households now have upside-down mortgages. For the first time ever, mortgage debt is bigger than the total value of homeowner equity — bigger by $836 billion. The root of the problem is the same as it has been for centuries. Credit leads to debt that spirals into ever-greater debt.

Lenders then gamble that they can make even more money by devising new and more lucrative ways for people to go deeper into debt. The people themselves gamble on what they consider a sure thing, borrowing what they need to pay off their debts, set themselves up for retirement or finance their lifestyles.

Credit has become the drug of choice of the modern world, far more widespread than any other.

Ted Rudow III,MA
Menlo Park

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