Why is it a good idea for individuals to go into debt up to their eyeballs just like the government.
The housing bubble was created because it vastly increased demand by lowering lending standards. Now that those folks can’t pay, the bubble pops.
There is nothing preventing private lenders from holding loans to doctors, lawyers etc who have high income upside, they just can’t sell them to the government and leave the tax payers holding the bag if things go bad with the loan.
“The housing bubble was created because it vastly increased demand by lowering lending standards.”
Which then fed on itself as people could bid up the price of houses with money they were never going to pay back, forcing financially responsible people to pay an artificially high price. For those responsible people, it was like they had to use their own real money to bid against someone using Monopoly money.
“Why is it a good idea for individuals to go into debt up to their eyeballs just like the government”
Because debt is the basis of the money system, and when “consumers” stop accumulating debt the system is going to collapse.