[quote=briansd1]ucodegen, I actually think that there is mutual culpabibility between government and business.[/quote]
I wouldn’t let ‘individuals’ off the hook here. There has to be responsibility for your own actions and to stop playing the ‘victim’ card. Victim mentality is very self-defeating.
[quote=briansd1]The government is allowing the most sophiticated financial products (adjustable pick-a-pay mortgages, pay-day lending, car leases, etc… ) to be sold to the poorest, least educated people who don’t undertand those products. Those people end up getting in debt buying things they don’t need.[/quote]
I wouldn’t call them ‘sophisticated’ financial products.. but I would call them more complex, harder to understand.
I would be careful about outright banning these(they have a potential use, but the real problem is education). I think a better approach would be to teach basic finance in High School(along with putting drivers ed back in High School). There has been too much special interest driving what is taught in High School. I saw some of what was added to teaching math, and I became quite disturbed. It should be basics, not trying to define new terms for everything to make it ‘new’.
The basic approach to what is taught in public schools, should be to list everything that someone would need to know or skills they would have to have to function once they hit 18. Take this list and prioritize it by importance(how much harm to the individual if they don’t know it, don’t have the skill). This should be the list of priority items/skills to teach in public schools. Everything else is an ‘elective’. The high school I went to even had a basic “Law” course (Civil/Tort and Criminal) that lasted a year. I would still love to have that text book.
[quote=briansd1]IMO, it would be best to ban certain financial products altogether or at least cap the interest rates that can be charged.[/quote]
The problem of capping interest rates is that this is the very thing/approach that got us in trouble. Interest rates are based off of a base zero risk rate of return + a risk premium. If you cap, you prevent adjustment based upon risk. The products that I think should be limited/eliminated are the ones that have ‘teaser’ rates.. with the ‘promise’ you could always refi later. This is like fishing.. getting the fish to bite the hook.
