This is just my personal opinion and I am interested in hearing others opinions.
I know the economy is poor right now and like most have no idea when it will pick back up again. Horses being considered a "luxury item" tend to be on of the first things people cut back on along with the other "luxury items. Personally, I don't consider them luxury, I learned a long time ago that horses in my life are almost as neccesary as breathing.
So to the breeding issue. Many people say that responsible breeders should stop breeding due to the poor economy and the surplus of unwanted hroses.
My opinion is that is if all the responsible breeders stop breeding that will only leave the irresponsible breeders breeding (because we know they are not going to stop), which will lead to a surplus of poorly bred horses in the future and little quality to build back upon once things turn around again.
In all honesty, I don't think its the responsible breeders that need to stop. Its the backyard "I wantz a pweddy pohneh to lovez foreever" breeders that need to stop.
As the horse industry stands now, there are too many horses and not enough homes. There are thousands of unwanted, neglected, and downright abused horses in our country (Most of which end up in these situations because the owners no longer have the means to care for a horse, the owners don't know the first thing about proper horse care, or the horses have no homes at all.) The reason for this is almost exclusively the fault of the recession and the fact that people are breeding horses when they shouldn't be breeding in the first place!
This problem of equine surplus has gotten so bad that some states are considering opening up horse slaughterhouses just to deferr the cost of shipping these horses to Canada and Mexico.
While I strongly disagree with the slaughter of horses, I have come to accept is as a temporary nessicary evil. If horses weren't getting slaughtered, they'd end up abused and starved to death in a dirt lot.
I think we as the people of the horse industry need to get things back under control if we are ever going to get the supply/demand ratio back in balance. We need to try our hardest to discourage people from breeding horses that don't need to be bred. In the meantime, responsible breeders should breed just for the demand of their horses. And we need to push buying over breeding. Since horses can live to be over 30 years old, its going to take some time for things to shift back. But once the surplus slows, prices will increase and the horse market will start gaining some worth to it.
As far as the grade vs. papered argument, I believe papers don't mean sh*t. Yes, papers add value and can help in identifying possible health issues; but an outstanding horse is an outstanding horse, papered or not. Do I think every grade horse in the world is worthy of breeding? Heck no. And do I think every pedigreed horse is worthy of breeding? Absolutely not! But I've met a few grade horses that I'd rather own over their papered, fancy pedigreed competitiors any day.