November
20,,
2009
GUEST EDITORIAL
Reluctant
to Lend and Spend
By IVAN BELIVEAU
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Some Goffstown banks are reluctant to lend money to residents. That fact isn’t so important because many Goffstown residents aren’t willing to borrow to spend anyway.
Years of borrowing to spend, has simply left too many residents (like the rest of the country) with too much debt. Add to that fact that too many people are losing their jobs, the value of their house and stock investments has declined and you have the “perfect financial storm.” This isn’t the only problem with lending and spending.
People without jobs, too much debt and houses that are “underwater in price” don’t really qualify for new loans. This wasn’t true in the past few years.
Essentially anyone could walk into a bank and get $500,000 (many times) without proof of the ability to pay back the loan. What a concept!! The banks had a field day.
This was possible because banks very quickly “bundled” these loans together and sold them to someone else, who sold them to someone else; who sold them to someone else… The Internet will provide the details for that ongoing debacle.
Because all that “financial foolishness” is unwinding, the private USA Central Bank (the FED) is desperately trying to “reflate” prices by weakening the dollar. This action will have the usual consequences when a currency is devalued.
When all this financial nonsense has reached a predictable conclusion, things will return to a more normal banking environment.
Local banks and credit unions will loan money that they have to people that can afford to pay back the loans. What a revolutionary idea!
In the meantime, we can all hope that Goffstown and the schools will “level fund” next year’s budgets to this year’s actual expenditures until a financial storm “all clear” signal is given so that property taxes won’t increase next year. Residents deserve this action!
I just thought that you had the Right to Know (R2K.)
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