Predatory Lending and Inequality

1272 words 6 pages
For many years, the American dream has been deteriorating for several reasons. Paul Krugman, author of “Confronting Inequality,” blames the “inequality of our income distribution.” He explains how and why the differences between wages of the poor and wealthy are a major conflict in today's society. Constance M. Ruzich and A. J. Grant, authors of “Predatory Lending and the Devouring of the American Dream,” argue that the downfall of the American dream has occurred because of predatory lending acts. According to the authors, predatory lending and inequality play a very significant role in the corruption of the American dream.
Predatory lending has caused many conflicts in the American society. Victims who fall for predatory lending are
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Poor nutrition, thanks to low income and a lack of social support, can have the same effect.” What Krugman is saying is that not all Americans have equal opportunities as pertained by society. Some people do not have the immediate opportunities that others may have or happen to grow into. In other words, not all Americans start out the same, which means they do not reach success the same way.
Predatory lending and inequality have had a significant role in destroying the American dream. But how can these two elements cause this much mishap? The equality of Americans is not balanced in today's society, nor has it ever been. Generally speaking, wealthy people live better quality lives than those of the middle class. Individuals of the middle class thrive to live better lives by buying homes that they are unable to afford, thus, causing financial conflicts and difficulties paying income taxes. They are then required to pay subprime mortgages. These mortgages have higher interest rates which means individuals must pay at a faster rate. Not only does this cause conflicts within the homeowners, but their children are severely affected as well. Good quality education for children becomes more difficult to obtain. Ruzich and Grant say, “The rate of defaults on subprime home loans was greater than that of prime mortgages. . . the defaults of the subprime loans occurred in numbers that created a cascading