Most of us are dealing with debt on a very small scale: our own pocketbooks.  I was just wondering what people thought about the bigger picture.  Specifically, I was thinking what it would be like if the government were to take the reigns of the lending industry and do some heavy regulation.  In an ideal setting, what kind of involvement would you like the government to take in the lending industry?

I, for one, would love strict regulations regarding interest rates (especially on credit cards) as well as putting the thumbscrews to predatory lending practices and forcing lenders to provide clear and understandable amortization schedules upon undertaking a financial obligation.

Credit cards- There was a bill in congress I believe that died. On predatory credit card rates I think it may have been tied to pay day loans. This is even worse than the CCs.

Subprime loans- The 2 year fixed that converts to a adjustable is no longer avail. congress got that one out.

Lenders about 3-5 years ago needed a market, because most people with a brain or credit re-fi when rates were low.. One this dried up the sub market took off. Lenders were lending to people no down inflated stated income to people with credit scores of 500. What a joke, people thought oh I will make money the house will raise in value and I will sell. Well it didn't work most of these loans were arms or interest only. Payments went up and people were out of house.

I think it should be harder to get credit cards!!! 

I mean it's a piece of cake for a student to wind up with $5,000 to $20,000 in unsecured credit . . . which (in retrospect LOL) I think is ridiculous!  I'm not saying that we don't put ourselves in the positions we're in, BUT if it were harder to get all that "free money" there would be soooo much less debt!

Of course, it would be very hard and expensive for the government to regulate etc.  And people would complain, so I guess I'm being a bit idealistic!

The more regulated it is, the more expensive it is.

In the USA, credit is cheap.  Yes, some people make bad choices and live beyond their means.

The capital markets that made loans that shouldn't have been made are taking a hit due to loan defaults, and they know better than to do that again (if they are still in business).  The ones that didn't make those bad loans see the consequences of bad loans and probably aren't making those bad loans now.

If you need government to stop you from making bad decisions (e.g., from accepting a loan that's too expensive), then you have problems that government can't solve.

Just try life in some other countries that have no capital markets, or very expensive capital.  Yes, you'll live at a lower standard of living, and no, you won't have a choice even if you decided you can now be responsible with credit.

Government's job is to enforce protection of private property and contracts.  Without that, we're all dead.  Past that, government tends to cause inefficiencies and screw things up.