I know it may be hard to believe, but it used to be quite difficult to get a credit card. You used to have to apply. There were no pre-approved notices in the mail. Credit card companies’ points of view before 2006 was that you shouldn’t give someone a credit card if there were a possibility that he, or she, couldn’t pay his, or her, bill.

At the beginning of the 2006 fiscal year, however, after much lobbying from credit card companies, a law passed that forced people filing for bankruptcy to pay off credit card debt. Just around this time, lovely letters from Visa and American Express started popping up in your mailbox, telling you that you had been pre-approved for a platinum, advanced, special, members-only credit card with a ridiculously huge limit.

And here we are, now, a credit-card nation. Or, should I say, a credit-card debt nation. Collectively, Americans rack up billions of dollars of credit-card debt each year. Add that to the rising cost of food, fuel and other living expenses, and it becomes apparent why the middle and lower classes are in a financial squeeze.

But that is just the tip of the economic iceberg.

I’m sure that some people are familiar with the word “sub-prime.” A sub-prime loan (usually in the form of a mortgage) occurs when a bank makes a loan to a high-risk client, with the looming possibility that the client will not be able to pay the bank back. Its haunting presence has become as common as Britney Spears’ emotional relapses.

In order to provide a sub-prime loan to a customer, banks must take out loans from other banks. Somewhere along that line, a bank will sell some of its loans, both normal and sub-prime, in a bundle on the mortgage-bond market.

When the client makes payments on a loan, the bank can make payments on its loan to other banks. In return, those banks can pay off the people who bought mortgage bonds. When high-risk clients can’t make their payments (which lenders should have foreseen), everyone gets stiffed, and the whole system collapses like a house of cards.

Many banks engage in this process, so it is easy to see why we have a crisis.

Sub-prime loans also played an important role in another, recent financial crisis, the “housing bubble.” It became working policy in banks that if anyone should get a loan, everyone should get a loan-and a big one, too.

That meant that sellers could charge whatever they wanted for their houses, because buyers would almost certainly get a loan, no matter how poor their financial situations.

Thus, when the bubble burst and housing prices fell from record highs to record lows in a matter of months, the biggest investment that average Americans could count on, the equity of their houses, went down the tube.

Then, the Fed made interest rates do a little dance, and we all got screwed. Alan Greenspan is laughing at all of us.

Why didn’t someone (for instance, the government) regulate this? The government, unfortunately, has financial problems of its own. With a $9.24 trillion dollar deficit, the U.S. government had to borrow billions of dollars in loans from China, India and Japan.

This is why, when our stock market takes a dip, international stock markets dip, too. The United States is just another high-risk borrower in an international community of bankers.

When the Dow Jones dropped by a few thousand points a few weeks ago, foreign investors panicked at the possibility that our government would default on its overseas loans. As a result of the incestuous web of outsourcing and overseas investment, stock markets around the globe plunged.

Prominent financial figures doubletalk us into believing that we are on the verge of a recession. That is irresponsible. We are in a recession, people.

So, what do we do? I really don’t know. However, I believe we can start by balancing the budget. How is a government with such huge debt to help us with our debt? I must say that is a sad case of the blind leading the blind. Will good policy prevail? Only time can tell.

George Caputa is a junior in the College of Arts and Sciences.