Would we Americans benefit?

Question

Would Americans be better off to share in the 700 billion dollar package to stimulate the economy.  Why give the money back to the greedy people who helped create this economic problem?  I read an article about a lady from Boston who lost her home.  The story goes that she was single, black and had 3 children.  She bought her "dream home" by borrowing the down payment and borrowing to buy the house.  Her combined mortgages were, I believe, $4,000. She, unfortunatley lost her job, and had to forclose on her home.  If people were not in a secure job, why did they do this?   To me that is a high 6 figure income yearly to support that kind of payment with all the other expenses.  If the people who borrowed money from these banks and lending companies did not foresee any change in their income, why would they be so gullible to fall for such a scam?  I understand the concept to have the "American Dream", but to not be in a position that you know is not going to change, why do it?  I just don't understand the way people think sometimes.

Marvin the Martian · Accepted Answer

You have no idea on how the system works. I'll give you a clue:

Banks print out money (Yes, the Federal Reserve is not a government-owned system but a system owned by several related Banks) > This increases the money supply of the nation > This makes too much money chasing too few goods and products. 

Then, due to having more money than previously, you're self-estemm is built-up and you believe you can afford anything. You wake up and see a beautiful deal on a loan. Wanting to pursue the "American Dream", you participate in the loan.

Banks decrease money supply by printing less money which in turn inflicts higher prices on goods > This, as well as other factors, affects corporations as they have less money to spend > Corporations make people redundant to pay off bills > Banks repossess homes > Lady is evicted.

From printing money out of thin air to earning interest!

Amber · Answer

It wasn't really their income that changed most of the time, it was the interest rates on the loans.  Some people honestly thought they could afford a $700,000 home while making $50,000 a year and they didn't read the fine print.  Stupid, no?  It's just as much their own fault as it is the banks, and both lenders and borrowers screwed us over.  Unfortunately this country can't survive without Wall Street, so the best way to fix Main Street is to put money back into our financial institutions, with higher regulations of course.

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Would we Americans benefit?

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