Who Is To Blame For Debt Crisis?

Here we are talking about debt seen the advert running alongside this!!

DIYFixer has it just right along with Petitemisschief. Cloudwatcher hit the nail on the head when mentionioning about the attitude of kids in schools. What are their parents telling them. "Yes you can have the best trainers, we'll get the money". My parents never borrowed anything apart for the money for their house. If they couldn't afford it we didn't get. Simple. A static caravan holiday in Lowestoft was our summer holiday. When they bought their first brand new car in 1972 it cost £1000 (about one third of the value of the house they were living in). They saved every penny before buying it and we went without as a consequence. I thank them for that lesson. I have never borrowed beyond my means. People really need to start taking responsibility for their actions and stop putting their efforts in finding someone or something else to blame. We really do live in a blame society.
And Lizzie1410, when you say "some are better equipped for this than others" when referring to people borrowing money, then surely that's what all this is about and the point made by DIY, if you are not equipped then you don't borrow. It really is that simple.

As most of the comments on this article say or imply, what happened to financial discipline?
Why should a financial institution or an individual who has got into difficulty through their own greed, stupidity or financial incompetence be bailed out?

I'm 42 years of age and come from a working class background, banks and financial institutions have been falling over themselves to give the likes of you and me money that we can't afford to pay back for years. I must have 12 different credit cards and at one point in my life I owed £75k on them. At the time my yearly income was £30k, i had a mortgage of £128k on a house worth £135k. I have always paid my debt on time whatever my situation, as i have worked hard to make sure my wages met my expenditure. My point is how can anyone justify lending these amounts of money out, these institutions allowed me to get myself into this predicament whether i could really afford them or not. I could so easily have become another case at the courts but chose to get myself out of the trouble i had created. I now have an excellent credit score and am very proud of that fact but know it could have been so very very different. Simply we are all to blame for this situation.

At last. When first reading this article I thought our nation was doomed and I was the only one thinking what a bunch of soft spineless whingers we have become. But after reading many of the comments here my faith in our society is beginning to return. Of coarse its the people who borrow who are at fault. If people are thick enough to be duped, swindled, forced, cajoled, intimidated or whatever to borrow money from their bank and get into trouble when thing go tits up, then tough!

I understand that young mothers students nurses doctors etc etc cant pay back loans they ve taken out.....so dont both nothing will happen to you don't, worry about it.

We really just need to teach our kids responsibility for their own actions that would probably sort out a good many problems our country has seen rise recently including this one ;-)

Oh BTW I hate banks as much as the next person. But you might as well blame the sea for falling off your surf board.

My take on this is that the blame is a 50/50 thing. Yes the banks should shoulder half of the blame for pumping people into excessive lending without too many or no checks at all. Whatever happened to common sense and basic maths. If you throw money around like they have been doing, you are not going to get it all back, stands to reason. Secondly, I also blame people who borrow from banks. Do they not think that they may either be borrowing too much or what will happen if they cannot pay it back? Do they not consider the reality of how they would pay the money back if for example they lost their job or their wife were to fall pregnant? When I was brought up, if you couldn't afford it, you saved for it. This in turn taught you the value of saving and the increased pleasure of expectation whilst you saved for the day you could afford to go and buy what you wanted.

I can't agree with zyliminy that debt is wrong in itself. I took out quite a big loan two years ago for a lovely new bathroom: but I can afford to make the payments without trouble. Nothing, in my view, wrong with that. But I agree totally with all those who mention student loans. The one thing we teach all University students is that big, big debts are OK, by forcing these loans on them. I was lucky: I had an industrial apprenticeship, and BP paid for five years of university education for me. Nothing like that now! Bring back the student grant: these young people are doing us a favour by living on very low incomes for three or four years and working to get qualified. Then the debt culture will start to diminish.

I generally agree with the article.
I think the present government have fuelled debt, partly by conning us with the supposed low inflation figures which in turn made credit easy and available due to low interest rates. We also have a culture of people who cannot wait to have material things, they are a must have now population and will borrow to satisfy that need.
Students have to go into debt to study for a degree, another money saving venture by the government.
Gordon Brown as chancellor must take a lot of the blame, he speaks endlessly about his prudence and financial rules that must not be broken. He spent all the money left by the previous government, money which he stole from pension funds and everything else he could lay his hands on. He also built our so called wonderfully successful economy on personal debt.
I agree that people should not borrow beyond their means and are to blame for the predicament they find themselves in, they borrowed the money, they should pay it back by whatever means, sell their homes or posessions but do not expect responsible people to pay their way for them.

Im sorry but when u are 18 and u immediately get the offer of credit cards through your door and have no real idea of the real concept of what your about to take on I dont think you can wholely blame the child (as thats what i was, a child!)
the government without thinking allowed my generation to become enthralled in this buy now pay later environment as credit is splashed everywhere!!
although as an adult now (26) I take full responsibility for my actions and NOW know the sh*t I have gotten myself in and am still coping with credit cards I will not accept that at 18 I had any clue or level of responsibility to take on what I was given willy nilly by irresponsible greedy lenders!
they have tightened this all up TOO LITTLE TOO LATE and we now have a generation of ppl who are not only screwed for getting on the proeprty ladder but are also in piles of debt.

Eductate the children as to the consequence of borrowing (as maybe not all parents do this) and show them from a young age that borrowing leads to dispair! dont assume that when u hit 18 u are therefore able to make a rational decision on what looked like easy money to me at the time.
everyone is to blame ESP the FSA for not creating tight enough rules about lending to youngsters in the early 2000's!

I blame the pension companies. They have enormous power because we are forced to give them control over enormous amounts of money; money they then use to purchase control of all kinds of businesses. Including lenders. They never punish mistakes, even when bordering on the criminal, and instead, encourage this activity by giving those responsible multi-million pound severence payments to go away or accept promotion. Politicians say nothing because they hope to benefit when it comes their turn. An evil tri-umverate with no regulation except what they devise for each other and all fuelled on our money.

Much of the debt crisis is also caused by irresponsible banks who undertook complex financial transactions they didn't understand getting themselves into huge debt when the loans defaulted because they were based on sub prime home loans in the US. They then pull the plug on cheap finance at the same time as everyone is in debt partly due to their encouragement and irresponsible lending in the UK. A real double whammy. Surely some of the bank chiefs should consider their positions before it gets even worse. The Government and FSA should have seen it coming too and last but not least a society based on greed is now paying the price.

Some of us have events in our lives that we have no choice but to get a bank loan. Few take the decision lightly and there always has been checks to ensure one is earning enough to make the repayments. Banks do round up the amount you are asking for. You ask to borrow (say) £6K end up owing £8/9K with interest added!

It always has been common sense that financial institutions are more likely to lend to you when you take PPI with it so we signed for that too - in droves. Thinking we didnt have the choice. Now banks call their people "advisers" and once they were just that. Folks who would give you astute advice on your money - since the 80s (at least) they are only sales people and poorly trained at that.

We have been queuing up at FSO's door because banks have been ruthless - now it's our turn to demand a product that is "fit for purpose".

Like many of those who have already commented, I was brought up in a culture where, if you did not have the money (your own), you did not buy it. Indeed, my parents' mantra of "We can't afford it" is so well engrained that now, when I can afford a lot of what the consumer society offers, it still prompts me not to buy and I have to make an effort to override it. But, as the substitute question to myself is: "Do you really want that xxx?" I usually find myself not buying because the honest answer is "No".

To get to my actual comment: As a small shareholder in a number of banks, I have seen my investment diminish rapidly in recent months, but I hear that those traders and other senior bank employees, who should be taking responsibility for the mess they got financial institutions into with their over clever opaque repackaged debt instruments and the like, are still getting hefty bonuses related to past "performance". Surely their bonuses should now be negative, ie they should be called upon to repay some or all of their now seen to be ill-gotten gains.

While I agree that there are many irreponsible lenders out in the world I am currently treasurer of a community credit union rersponsible for the safe keeping of member's deposits which are used to lend low cost loans to other members.
The change in the bankruptcy rules have hit us hard. people are being told oon TV every day that " debt counselling companies " can wipe out your debt within a certain time period. One year if you do choose bankruptcy and three years if you choose to enter into an arrangement. What most of the public do not realise is that these firms (some of the largest accountancy firms in the country" see this as a major earning stream as they deduct a rediculously high level of fees before any creditors are paid. In a recent case after deduction of their fees (in excess of £6000) we were offered 17p in the £. The new rules have created a get rich quick field for these companies to the detriment of responsible lenders

Actually I blame the government, almost entirely. My kids have both recently left school. I asked them how much time in their school lives they had spent learning about personal finance. The answer was none at all. The only information which most children have about personal finance is the endless adverts for loans which rarely make a big issue about paying it all back. In fact our children choose their lifestyles almost entirely from TV advertising which urges spend, spend, spend and have it all now!

We need to educate children at school about personal finance and lifestyle along with the present curriculum subject of Personal, Health and Social studies.

Like the author of this article I worry that the people who will end up paying for all this are those amongst us who have behaved responsibly.