Forum Post: Causes of Our Current Problems

Two things caused the problems we are all currently experiencing:

1. Greed of the U.S. consumer

2. Lack of financial sophistication of the U.S. consumer

Borrowing money is a privilege extended to those who are deemed to be worthy of it. It can be extended at whatever rate the lender chooses and the borrower agrees. The borrower should not agree to rates he believes are unfair, oppressive or uneconomical for him. If he agrees to the rate, it means he finds net value in whatever it is he purchases with the loan less the cost of the loan.

If the borrower does not repay, he broke the contract and should be punished. If the lender commits fraud, he broke the contract and should be punished.

This concept requires no new laws or regulations to be passed.

What this concept does require, however, is simple personal finance skills. Most U.S. consumers do not have these skills and therefore cannot make the proper economic judgment required to successfully borrow money.

We can very easily prevent this crisis and many others by encouraging our children, co-workers and neighbors to get educated on matters of economics and personal finance. It truly is as simple as that. It does not require an election, or a new system of government; it simply requires a few ounces of personal responsibility, motivation and curiosity.

Instead of "Occupy Wall Street", we should have an "Occupy the Classroom" movement where we encourage all our brothers and sisters to arm themselves with the skills and education to protect them from repeating their financial mistakes.