I just read an interesting article about loans and how they are tightening procedures now and how companies are loaning more than ever. But why do we really need loans? Are they really necessary, or just contributing to the bubbles that we do not need?
Why should people be able to loan their way to afford things they cannot afford? And why should this practice again make other people unable to afford what they really should afford without taking a loan? Because loans bubbles real estate prices. If no one could loan to buy houses, then housing would be adjusted to average savings, but people would need to save money to buy houses and buy houses they could afford, not ones they just loan money for and pay more in interest rates than the real value of the house in a market where people cannot loan to buy. Should a house cost 20-40 years of the average mans life and sweat in the same place?
Am I just completely wrong in this assessment, or are loans in reality completely unnecessary?