Should the amount of credit available to american consumers be significantly reduced?

I think it should. Americans as a whole are spending more and more. Everything is like a domino effect; as in as gas goes up we as consumers have place more money into filling up the vehicle. Not only that but as a side effect of this food rises due to gas consumption needed to get to the destination. There are countless other examples. So to answer your question it can be interpeted as an opinionated question. We have to have transportation, food, etc and all of which effect us the consumers.|||it's a free country, so I guess no one wants to limit the right of credit shops to sell even more credit to already over-leveraged consumers ;-)





each time a government wants to prevent a market from clearing / functioning, it wants to make sure it has a very good reason. One example is obviously drugs (but note that some drugs, such as alcohol, are legal and the government makes tax money from them).





near-term, allowing consumers to gear up even further will help drive consumption, which can be good for everybody. Longer-term however, if a big credit crunch comes, this could seriously damage the economy, for a while.





of course the government could apply more stringent regulations on the credit industry, because today there is basically almost no level of indebtedness beyond which a consumer will not still find some institution willing to lend even more (at punitive rates, and potentially using violence to recover interest, of course).





interesting question in any case. In my view, consumers around the world are under-protected by law on this matter. Luckily in some countries, such as Germany or Japan, consumers simply hate debt and therefore remain way under-leveraged in general, at least by U.S. standards.





hope this helps a bit|||This question should be based on the consumer. I have a lot of credit, but I am able to pay my debts, so no problem|||In other words...should we protect people from themselves?





America the nanny state.





No, the American consumer needs to learn self-control or face the consequences.|||No it should not. What needs to happen is for people to take responsibility for their actions. There is no reason for any one to get into trouble with credit if they just use it responsibly.





And I don't think the credit card companies are to blame either. People need to read and understand what they have read before they sign anything.





Call me old fashioned but anyone that gets themselves in trouble and then tries and blame everyone in the world except themselves for their troubles are just irresponsible.





And the only way this type of people learn is to be punished for their mistakes.|||The amount of credit is not the problem - it's the amount of credit obtained fraudulently. "State income" loans, for example, let people claim whatever they want regarding how much they make, with no documentation required. Everyone in the process - the borrower, the broker, and the lender - all know that most of the people applying for these loans have vastly overstated their income, and yet the loans are approved anyway. If the truth were known, the loans would not be approved.





The amount of credit would tighten significantly If all lenders were required to simply stick to reasonable underwriting guidelines subject to verification.|||I'm not sure about that, but I think that the credit card companies should have to assume some of the blame when they increase credit limits without authorization. They say nothing when a person is charging away only making minimum payments each month, but are thousands of dollars in debt, but God forbid someone ever miss a payment or can't pay because the card is maxed out. I think there is responsibility on both parties. Certainly, people need to understand credit and learn some self control, but when the credit card companies see someone obviously not able to pay since they're only paying the minimum, but they're charging excessively, I think they're partly to blame for allowing it.|||If that is to happen. US will go into long recession. Unfortunatly a big chunk og economy's health is based on consumers, who rely on debt.


http://www.letsgobble.com/|||Well, since average Americans' saving is negative 1%, they really should reduce the credit extended to most of the people (I think). I know many people who have house payment is more than 50% of their salary, and their credit card is maxed out, paying minimum on it. And they also have a brand new car with $500 to $600 car payments. If something happens to their jobs, they are in big trouble. Some of them are close to losing their house....