The whole economic crisis that the United States is currently in really pisses me off. We've brought the entire thing upon ourselves by being a nation full of economic idiots. Apparently, while my parents were teaching me that no, money doesn't grown on trees, a whole lot of other people's parents were teaching them the exact opposite.
Somehow these people looked at their salaries and then looked at the price of the mega-mansions they wanted to buy and figured that somehow the hundreds of thousands of dollars in difference would miraculously resolve itself. They ignored the details of the terms of their adjustable interest loans, thinking that by the time the interest adjusted they'd have magically earned tons more money and it would be no big deal.
Then once they had their mega-mansions and adjustable interest rate loans, they took the little pieces of plastic in their wallets with their names on it and some random numbers and went hog wild furnishing their homes, and buying the big cars and the fancy clothes and the luxury vacations that you are apparently entitled to if you live in such a home. Who thought they would one day have to pay actual cash for those purchases? Isn't that little plastic card magic?
And now the entire nation is paying for the stupidity and selfishness of these people. Those of us who wisely put our money into savings are watching the earnings on those savings shrink as the interest rate is cut to rescue those who made bad choices. Those who made investments in preparation for retirement are watching their stocks take huge hits as the market struggles to remain afloat amidst the crises in housing and credit cards. Those of us who take the time to budget are watching as our budgets are blown up by the sharp increases in gas costs, food costs, and other costs, which can all be traced back to the weakness of the dollar caused by the constant lowering of interest rates. Our buying power is rapidly shrinking. Our salaries aren't increasing. We will all feel the pinch of living in a consumerist society in which we're encouraged to buy, buy, buy without any regard for how we're going to pay, pay, pay.
I am by no means a financial genius, but it doesn't take much more than simple subtraction skills to know that when you're subtracting your expenses from your income, the number on the top (aka the income) better be bigger than the number on the bottom (aka the expenses). And the more positive difference between those numbers, the better. We'd all be in a better spot if we could learn to live within, if not below, our means. Although with the government bailing out all of those who haven't quite figured this out, how's anybody ever going to learn? Maybe this is cold-hearted, but I was always taught that you have to live with the consequences of your choices, and I still firmly believe this to be true.
9 comments:
I agree. It's amazing how many people there are out there though that really have no clue how to handle their money. They have those shows on tv where some financial guru goes in and "rescues" some couple who are in financial trouble and it's mind-boggling how much money they spend. They're driving $50,000 cars, eating out every night and they make $30K a year and they can't figure out where they went wrong. The sad part is that the rest of us can be as smart about money as we want, but we'll still end up paying for the idiocy of others.
By creating a binary between those that are financially responsible and those that are not, let's not forget that post-Reagan American capitalism is predicated on such irresponsible consumer behavior.
There's nothing like keeping a person within the consumerist system by advocating buying and then dissolving debt so that this person can then buy more. [stimulus checks, anyone?]
The truth of the matter is, obviously, that as long as the person is a consumer and not a producer, he/she has little power, no matter how much he/she is consuming. [The man who dies with the most toys....]
Financial responsibility, then, although brought down by the irresponsibility of others, is, nonetheless, a form of personal empowerment. Unfortunately, the absolute worth of this empowerment cannot be tracked via the market, as your financial standing is dependent on the acts of the irresponsible other, who, in turn, is being irresponsibly stimulated to be irresponsible by the system.
Education is the key and it's sadly lacking in the finance dept. I remember when in was in grade school about the only thing that I learned about money other than how to count it - was how to balance my checkbook. When I worked in housing - years ago - applicants had to go thru a fairly extensive set of financial seminars before they could qualify to buy a home. I think that consumer Economics should be a required course in high school maybe even elementary and middle schools.
You left out the part where the government (the worst offender of unbalanced budgets of us all ... if you look at US balance sheet, we're the poorest country in the world) is planning to take our taxpayer money to bail these people out. So not only are we passively paying for their mistakes in lower interest, shrinking stocks and higher consumer prices, but we're soon going to be actively paying them too!
And to note, the title of your post makes you sound like a darn -- i can't say it -- libertarian.
Honestly, there's nothing quite as libertarian as telling someone to wallow in his/her own financial irresponsible existence.
Huckabee, interestingly, has characterized such government bail-outs as a slippery slope toward "co-dependency."
It would seem to me, though, that no matter what political party we are discussing there is much more interest in "government handouts," to use a dirty phrase, when market jeopardy is part of the equation.
I sense that this will be a hot-button topic on Spargel.
I'm going to sit back and enjoy the banter, as to see where people fall in the "blame" game.
I dont if the country is to blame or if it is how our country's freedoms allow people to get in trouble. Credit Card company's, financial institutions, etc want people to not be able to pay there bills. They make more off of them than they do us(the ones wo pay our bills on time). The economy will always go forward no matter what the situation in the world or America is. Dont blame it on politics, blame it on our core values as a country. Land of the free and home of the Brave.
I'm going to spend my stimulus check on something I can't afford.
Gregory said...
"I'm going to spend my stimulus check on something I can't afford."
Better yet, spend it on a down payment for something you can't afford. I have talked to a few doing this.
Bob L
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