Loans and More Loans

The thing that has hurt our economy more than anything else is loans. Anybody even people with bad debt can go out and get a credit card which are given out almost like candy these days. People who are not qualified to get regular loans can pick up a sub prime loan with lower payments and longer pay-off times but with higher interest rates. What happens when those same people reach a point where they can't meet those loans (largely due to flexible rates)? They can turn to specialized companies who consolidate loans and will bundle all their bills into one lower monthly payment with even higher interest rates and much longer pay-off times. Time goes on and the flexible rates go up and those same people are starting to feel squeezed yet once again so what do they do? If they own a house or property that they have been making payments on then they have built up some equity and can refinance the property with a mortgage loan or equity mortgage. If and after they reach this point and default on those loans, then they lose everything. They lose their homes, their cars, anything that they have borrowed against, and who gets stuck holding the bag? Thats right, the people who loaned money to the people with bad debt.
So many people have done this that the housing market has gone downhill like a roller coaster and flooded the whole country with foreclosed homes so much so that in some areas its at a ratio of 1/45. Nobody can sell their homes, nobody can get a loan to buy a home so the economy becomes stagnant.