The U.S. government is like a bad father handing out money to his children so they don't misbehave. Why is it the that the U.S. Treasury feels its best policy it can offer is to hand out billions of dollars to everyone and everything, in a desperate attempt to save the economy. It's broken because the system does not work, and not because there is no credit. Those politically elite up on Capitol Hill cannot possibly think that because Americans can't put themselves into more debt, is the main reason why Americans climb out of a recession.
Let me introduce to those politicians in Washington a little thing called FICO. FICO known as the Fair Isaac Corporation is a company that stores credit scores, supplying formulas to retailers that can be used to see whether or not you are a risk to credit. It's a system that basically keeps you locked out of the credit system if you fall below what the market deems a low credit score. In a tighter economy, the acceptable credit score can be raised, and vice versa in better economic times. Credit scores are only measured based on your length of relationship with a debtor, and how often you failed to pay debts on time. It is not based at all on employment history or income.
So here's a formula. People are evidently spending more then they can afford. Their real estate assets are worth less than the amount owed. 62% of people in America rent, not as a choice but because of financial circumstances. Outside of the exceptionally wealthy Americans, everyone else cannot ever afford a home. Now with rising unemployment, getting out of debt, or even the prospect of owning a home is a far reach. Now, add to that formula, the U.S. government pouring more money into debt, and enabling banks to offer up more credit to an economy that simply is battered by not just an overwhelming amount of debt, but also penalties for not being in the black, and what you have is a cyclical promotion of consumers being locked into debt, and the destruction of anything monetary, and eliminating an economy that is fluid, offering consumers the ability to pay for something without incurring debt.
Currently, consumers are weighed down by the heaving pressures of bad credit. Each and every American is now stored in several databases somewhere in the world with a number assigned to them, stating what and how much credit they deserve. This number is the end-all-be-all of an individual's ability to get a loan, in order to purchase something that is way beyond his or her cash-on-hand spending capacity. A low credit score can be brought upon by almost anything these days, and most likely not just by not paying back on what you owe. Often times the media talks about and advises on how to manage money better, but what they fail to discuss is the reality of the situation, and that is how far down the road most consumers have traveled in spending credit, that the ability of managing money is null and void because they owe so much that their money doesn't actually exist. It's all being poured right back into debt. So the logical person would convince them self that the cost of living is priority, and can be paid for with cash-on-hand assets, and their debt can wait.
Technology that drives economy, as that used to monitor the consumer base is destroying the U.S. economy. It creates an ever-present watch-dog system on every consumer's spending history, and over time puts a large part of the population into a financial category of the unwanted. If a majority of the consumer base cannot spend then it leads one to think that there would be no prosperous economy. Who is really being saved here?
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