Posted on 08/16/2008 12:51:32 PM PDT by vietvet67
Thanks..
If you live debt free you have nothing to worry about.
The implication is that some or many of those people who bought fast food on credit did not have savings with which to buy fast food. If you are dirt broke, you should be buying rice and beans and vegetables — all cheaply purchased — not fast food.
So while we can’t conclude a thing from the raw data that $51 billion in credit was spent on fast food, it does imply the possibility that some of that was money down a rathole, purchased with credit card debt that will never be repaid.
I think that was his point.
Maybe not. If we enter a period of hyper-inflation, those who are debt free, but on fixed incomes will also suffer.
You sensible consumers will be paying more in taxes to bail out all of the foolish consumers. You are going to get tired of your hard earned money going to that.
Ping for later reading (when I’m not hyper-ventilating).
The point is that the “powers that be” made massive amounts of credit available for irresponsible people to abuse. They are complicit to the extent that they should NOT have made massive amounts of credit available to bad credit risks. You are paying for this as a taxpayer to bailout both the irresponsible consumers and the irresponsible banks that fed them.
That is the point. So yes, Bush, Clinton, Greenspan, the FED and the financials are ALL to blame. Very very much so. Very much so.
Yes, the powers that be are very much responsible for this and in fact have sought to find new ways to make people spend more and more on the virge of every recession we have been on in the past 20 years. Every time there was a chance of a dip in the economy, the powers that be said, “here folks, borrow and spend more to support the economy.”
That practice hit its apex when Greenscam caused real negative interest for years so banks could abuse that money by lending billions of dollars to irresponsible consumers.
That IS the point.
Or do you think all of those irresponsbible people were responsible through 1999 all woke up one morning in 2000 and said, “I think I’ll abuse my credit from now on?”
Ditto the inheritance cash point. I see that too amongst my own 45 - 55 year old peers.
Other than that, the article is very good.
Boomer inheritances scare me. I see another boom based on the rapid depletion of these inheritances, followed by a deep bust after the party.
In other words, rather than wisely save and invest their inheritances, I see them being squandered, leading to a short term economic boom followed by very tight times.
Never forget that this is the “instant gratification” generation. Those inheritances will be squandered on vacations to the French Riviera and vacation homes upstate so fast, you will miss it if you blink.
The problem with 401(k) and other retirement accounts is that even the most conservative money market accounts are SIV positive. Those CDO’s are marked-to-mirage, not marked-to-market.
It is suppose to be for retirement, not for emergency spending or a big screen TV. That is why it isn't counted.
Yep, me too. I am SURROUNDED by spendaholics. Also, they are almost invariably far-left democrats. I think the spendaholics' self gratification mindset and a leftist worldview are both strongly rooted in a fantasyland mentality.
"...they’ll run to me when they get in trouble."
Ditto here. Not only that, but I know for a fact that they scoff at me behind my back for my "right-winger" opinions. But who do they come to when the crisis comes? Oh, and BTW the crisis du jour is NEVER their fault.
"Trump is going to bail him out."
How many phone calls do you think Trump's people got yesterday?
I have one credit card that I use and I charge EVERYTHING I can on it. I have all phone and internet charges automatic paid on it. I was tired of writing checks and going to the bank for cash. I pay the credit card bill in full every month. I get cash for points. It has made my life much simpler and it’s nice not having to pay so many bills. Which reminds me...it’s time to pay it!
Responsibility? That comes with intelligence and experience.
Just because the rates were low didn’t mean that we purchased our first or second home without keeping the payments reasonable. Just because the realtor wanted us to mortgage to the max didn’t mean we bought into her sales pitch. Just because the banks wanted to extend our credit even further didn’t mean we took advantage and accessed that credit to pile on more debt. Just because the car dealerships had fantastic financing didn’t mean we ever bought a new vehicle.
You want to blame the powers that be for this mess? They can do whatever the hell they want in Washington, that doesn’t mean I will ever be dumb enough to fall for it.
The government wants to bail out all of those “poor people” that got suckered into ARM’s. Fine, I cannot do much about that.
But, I can use my intelligence and never just buy into what a politician promises in Washington be he Bush or Greenspan.
Those irresponsible people have probably never had a responsible thought before or after 1999. Again, that is their problem, not mine.
The other trend has been renting out houses bought on speculation to anybody and their 20 illegal friends. I used to live on the other end of the state, but you still here lots of scary stories.
Back during the boom the big problem was having your house stripped between when you closed and before you moved in. That probably isn't a problem now that there isn't such a market for appliances and fixtures.
I know several boomers who climb into greater and greater debt with the attitude of "I'll pay if off and it'll all be fine when Mom goes...." They see their parents' death as "Jackpot Day." Sicko stuff.
Oh, and they are all lefties, did I mention that?
Okay, that is entirely possible. Can you think of a way to wise them up before they splurge this great bulk away? The television, hollywood, even their kids seem to encourage the squandering on all kinds of disposable junk.
And there is the latest Kiasocki (sp?) rage that “you need to change the way you think about work” to get “others to work for you”. Thus, he promotes not spending habit, but an altered mind about hard work, savings, investing. I watched the tape and it makes your skin crawl. He really wants everyone to join these multi-level network marketing groups that primarily help guys like him, but burn the money on bogus “businesses”. The latest is a travel web-site certain to make you rich, laying around cruise ships. Amazing. You are probably right, this will be gone in 10 years.
Their problem has become your problem. Responsible people like you get to clean up the mess for the party held by the irresponsible people.
Government policies do in fact guide public behavior. For example, less homes would sell if there was no mortgage deduction on houses. More people would save money if taxes were lower on the interest earned on bank deposits.
Government policies matter. Now you and I get to clean up the mess caused by government policies, irresponsible bankers and irresponsible home owners.
I haven’t seen that, but I have friends who are in debt and just getting by who have big plans, and I mean BIG PLANS for retirement when they get ahold of Ma & Pa’d fortune.
Paying the debt off is a no-brainer. But these friends are talking about the homes they will own (as they rent now) and wonderful cars and vacations. Most of them have no savings and no retirement plans and are just barely getting by on what they earn. I suspect they will burn through their folks’s money long before they die. The last few years will be rough for them. No savings at all. Just social security.
Ouch!
Then again, maybe some will learn to manage money. I’m not hopeful. I don’t believe people who can’t manage money their first 65 years on the planet will suddenly learn the practice. Oh, they’ll behave a year or two and then the floodgates will open and it will be TIME TO PARRRRRR-TAYYYYYYY!
Just for one year mind you, they’ll say to themselves. But addiction to the good life will be hard to break after just one year of finally living well, and they will burn through that savings in short order. Not going to be pretty. I pray for them.
Of course we have to clean up the mess! I didn’t know that was even an issue. We will “bail out” the deadbeats, like the “rich” always have. I mean, we must be rich, we actually pay taxes BEFORE we get a tax credit or refund.
I have a relative that lost her $140,000 house, because she refinanced to an ARM, sold a portion of a property for $20,000, got a second mortgage of $20,000 and then blew $40,000, without making a dent in the first or second mortgage.
Last summer she moved into a thirty year old trailer. She then blew a significant inheritance.
And now she is living in a pole barn!
Poor thing.
Her next home will probably be a tent.
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