Sunday, April 17, 2005

Greenspan: More credit is a good thing

The implementation of credit in American society has stimulated economic growth. Credit cards and installment loans are accessible by almost anyone in the country, Therefore, there should be some mandatory education about how to use credit cards wisely. Greenespan advocated the popular use of credit and credit education as well as the concept that the policy makers should remain flexible, in order to adjust to an ever static world market.

The advance of credit makes it easier for people to buy things. It can also help lower interest rates for some and raise interest rates for others. Credit gives mortgage companies a good indication on how high to set the interest rate for a specific person. Now that credit cards have entered the main stream, the scope of credit becomes more and more of an indication to where a mortgage company should set the interest rate for a particular individual. There is also a chain reaction that helps stimulate the economy. In economy it is called multiplier effect, which means an increase in one person’s income will cause other people’s income increase, so the national income can increase greatly.

2 comments:

chenna said...

I think this is an interesting point. I've heard that the problem of high gasoline prices has more to do with the lack of oil refining facilities in America than anything else. I mean, are we hearing that the price of Oil in Europe is also at an all time high as well? This would be interesting to find out. Yes, America is the car capital of the world, but still, little is being said about the "shortage" internationally.

Bush stands to benefit from drilling in Alaska I'm sure, so I don't feel he would be very objective for this issue.

Daisy Zhang said...

I thin credit is really an important thing in the US. Some things can not leave credit. Like, when you want to buy a cell phone. I think it is a easy thing for American student, but it is different with international student. As an international student, you could not only have SSN, but also the credit. If you did not have any credit, you cn not buy a cell phone.