Wednesday, May 23, 2007

Maxed Out

I finished the book. I don't want to post any comments yet, I'm loaning the book to someone and don't want to cloud his judgement.

I will post a couple of interesting notes, one is a reference to another book, The Two Income Trap by Elizabeth Warren. Sounds interesting, I'm going to add it to my list. Another is a website for the Americans For Fairness in Lending. I haven't checked it out yet, but intend to do so soon. From the book, it sounded interesting.

One item of interest is the Small Business Administration role. Suppose you want to start a franchise of Burger King. You go to the SBA to get a loan, run the business for a year, then go bankrupt. Who wins and who loses? Well, you lose, because your credit is damaged. You may lose your house because you may have guaranteed the loan that way. The SBA (and taxpayer) loses, becuase they probably won't get all their money back. And Burger King wins. They sold a franchise and collected full value. They probably buy back the franchise at a discounted cost and re-sell it.

Same applies to student loans. If you borrow a lot and can't get a job to repay later, who wins/loses? Same losers as above, the winner is the college.

There's something wrong here.

(note: updated link to correct website)

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