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The 'Democratization of Credit' Is Over -- Now It's Payback Time
WSJ ^ | 10/10/09 | S. MITRA KALITA

Posted on 10/10/2009 3:21:06 AM PDT by TigerLikesRooster

The 'Democratization of Credit' Is Over -- Now It's Payback Time

By S. MITRA KALITA

NEW YORK -- Karen King owes nearly $36,000, more than she's ever earned in a year.

All day long, bill collectors call. She hunts for a second job, sometimes skips meals, and stays with other family members at a grandfather's crowded apartment, trying to get out of debt and turn her life around.

She largely holds herself at fault. "Years ago, I lived for now. It was so stupid," the 28-year-old says. "It's depressing, but I can't live that life anymore." Now, she says, "I basically want to live for the future."

The recession has forced a financial reckoning for Americans across the income spectrum. The pressure is especially acute for the low-income Americans who relied on borrowing for daily expenses or to gain the trappings of middle-class life. Shifting credit practices over several decades had enabled them to live beyond their means by borrowing nearly as readily as the more affluent.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: credit; debt
'Democratization of Credit'

LOL.

1 posted on 10/10/2009 3:21:06 AM PDT by TigerLikesRooster
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To: TigerLikesRooster; PAR35; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; happygrl; ...

Ping!


2 posted on 10/10/2009 3:21:32 AM PDT by TigerLikesRooster (LUV DIC -- L,U,V-shaped recession, Depression, Inflation, Collapse)
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To: TigerLikesRooster

” “... I lived for now. It was so stupid,” the 28-year-old says. “It’s depressing, but I can’t live that life anymore.” Now, she says, “I basically want to live for the future.” “

This girl needs to keep her day job - and her night job... She’ll never make it as a politician.....


3 posted on 10/10/2009 3:26:05 AM PDT by Uncle Ike (Rope is cheap, and there are lots of trees...)
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To: TigerLikesRooster

>>’Democratization of Credit’

>>LOL.

It is like the Democratization of our country. Not something to be proud of, as anyone familiar with the writings of the Founders would understand.


4 posted on 10/10/2009 3:27:18 AM PDT by FreedomPoster (No Representation without Taxation!)
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To: TigerLikesRooster
..."It's depressing, but I can't live that life anymore." Now, she says, "I basically want to live for the future."

If she thinks Bama gonna pay'em she can line up with the other fools....this b'tch should pay what she owes and quit complaining.

5 posted on 10/10/2009 3:37:22 AM PDT by Gaffer
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To: TigerLikesRooster

It’s amazing to me how the government has forced socialist programs onto private sector financial businesses and then make the incredulous claim the “capitalism” has failed.


6 posted on 10/10/2009 3:46:23 AM PDT by HEY4QDEMS
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To: TigerLikesRooster

It’s true. And if not abused, a good and great thing.

However us economic and financial ants have to realize we stand on a quicksand of the Federal Reserve and the US Federal Government that may, at any time change the financial and credit environment in a moment. Dropping rates to zero, punishing savers and the thrifty, causing people to search for more riskier returns( stock market, bonds anyone?) Or they may raise them to 10 percent.

The governments( town, state and federal ) have no, zero interest in financial education of us neo-serfs. They keep us ignorant, award fake degrees for the modern age, use elite undecipherable language (Greenspan ).

I could go on....

To paraphrase Lincoln. ‘We the government can fool/tax/order/command all the people some of the time, some of the people all of the time, and the rest we’ll buy off, or use the IRS, ATF, FBI and drag them through the courts until they are in jail or they live in a shelter.’


7 posted on 10/10/2009 3:49:09 AM PDT by Leisler (It's going to be a hard, long winter)
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To: HEY4QDEMS

Rise lather repeat.

Failure = more regulation, more state power.


8 posted on 10/10/2009 3:50:45 AM PDT by Leisler (It's going to be a hard, long winter)
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To: HEY4QDEMS

I would not blame the government. Rich people had huge amounts of extra capital and were faced with very low returns in normal investments. It is not surprising that they sought to make big profits through what is essentially loansharking. I would like to get 10% on my investments too, but always thought this was not a good way to do it.


9 posted on 10/10/2009 3:53:29 AM PDT by proxy_user
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To: TigerLikesRooster

The most important thing (other than the article itself) is something that appeared elsewhere on the WSJ site and that is education.

They reference it as a civil right issue. And on this one thing, I agree.

I was trained as a CFP (Certified Financial Planner) but ended up in the business of my first love...plants. Go figure.

My sweetie is a teacher. I cannot tell you how many times I’ve railed at him over this. Instead of spending a 42 minute class period on....diversity, sex ed, “green” training, and all the rest....

WHY AREN’T WE TEACHING KIDS MONEY MANAGEMENT ??????

Instead of setting up these outfits in neighborhoods to teach adults about this, this MUST become a classroom endeavor. It is worth that 42 minutes of classroom time.

Teach about checking accounts, credit cards. Teach about why payday loans suck. Explain how credit works.

I’m proud to say the state of Utah has passed such a measure. The rest of the country needs to follow suit.


10 posted on 10/10/2009 3:53:51 AM PDT by Daisyjane69 (Michael Reagan: "Welcome back, Dad, even if you're wearing a dress and bearing children this time)
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To: TigerLikesRooster

from the article,”In New York, their clients’ average debt is $18,000, and half have incomes under $10,000. “
More than enough fault to spread to the lender,the borrower and well as the politicians for not dealing with this issue 20 years ago.


11 posted on 10/10/2009 3:53:57 AM PDT by wiggen (Never in the history of our great country have the people had less representation than they do today)
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To: proxy_user
I would not blame the government.

Then you're not paying enough attention.

12 posted on 10/10/2009 3:58:20 AM PDT by 1010RD (First Do No Harm)
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To: Leisler
Failure = more regulation, more state power... = more failure.
13 posted on 10/10/2009 3:59:16 AM PDT by 1010RD (First Do No Harm)
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To: 1010RD

exactly.


14 posted on 10/10/2009 4:01:31 AM PDT by Leisler (It's going to be a hard, long winter)
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To: TigerLikesRooster
The banks have to make loans and they are in charge through the tyranny of the Fed so there will always be perverse incentives to borrow and spend.

Always.

End the Fed and the debt slavery will end.

15 posted on 10/10/2009 4:03:19 AM PDT by Vet_6780 ("I see debt people")
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To: TigerLikesRooster

What a great headline.


16 posted on 10/10/2009 4:04:08 AM PDT by MNJohnnie (The 0 years, Too bad a requirement for adult supervision was not put into the Constitution)
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To: wiggen

I can’t possibly explain to you how incredibly “money stupid” people are.

(Now you know how I ended up in plants. They don’t talk back!)

We have a million issues in our education system right now. But IMO, there is nothing that is bigger than this one.

Trust me, you haven’t lived until you’ve sat across from someone who had no stinkin’ notion that accepting the 24 credit card offers in the mail, might actually not be a good thing!

They don’t know that bad credit (once you explain what bad credit is) can PREVENT them from getting the job that they need.

They don’t understand that drug tests are for economic reasons (to weed out potential thieves), not for insurance reasons.

We have a big job ahead of us.

*banging my head on monitor*


17 posted on 10/10/2009 4:06:56 AM PDT by Daisyjane69 (Michael Reagan: "Welcome back, Dad, even if you're wearing a dress and bearing children this time)
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To: wiggen

Somewhere the risk/costs were taken out.

I suspect an entire generations of socialized Americans are unfamiliar, more and more, with the notion of paying.

The lenders are in the business of knowing who they are lending to. It is their problem. Maybe if lending loan losses were not wright off( ible ) that would tighten their act up.

The government wanted masses to buy stuff so that they could collect sale, excise taxes, and ‘spur/warp/distort/stimulate/corrupt’ peoples economy( ie, make them non frugal, non economical’ Turn them into unthinking, a political consumers. Sheeple.


18 posted on 10/10/2009 4:06:56 AM PDT by Leisler (It's going to be a hard, long winter)
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To: Daisyjane69
Teach about checking accounts, credit cards. Teach about why payday loans suck. Explain how credit works.

You have to teach them how to add and subtract first.

19 posted on 10/10/2009 4:07:11 AM PDT by EVO X
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To: Gaffer

“Low earners have more mortgage trouble”

WOW! Just wow. I SO did not see that coming. Could it be some people can’t handle mortgages? Oh wait, the banks were forced to hand them out like candy in the name of diversity. Thanks, Bawney Fwank.

The gal in the story was clearly living beyond her means, spending every cent of every paycheck as soon as it came, and more. How did this mentality come about, that everybody thinks they deserve a middle-class lifestyle (or even upper middle-class) without the income to support it? Not just this chick, but kids right out of college expect to assume the lifestyles of their parents, delayed gratification be damned!


20 posted on 10/10/2009 4:08:22 AM PDT by GnuHere
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To: Daisyjane69

You are going to have to fight the governments. They don’t want people having an economic education, as they are the biggest thieves in the world.

Right from your nice little thieving town. You think the cops, teachers, road departments want citizens fishing around THEIR money, costs, spending? No. Freek’n. Way.

Big business and big government love dumb, or if not, non educated, or mis educated citizens. Sheeple. Wolves love sheep.


21 posted on 10/10/2009 4:10:31 AM PDT by Leisler (It's going to be a hard, long winter)
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To: Black Birch

...and how to use English words with more than 2 syllables. They’re done a great job forming semi-literate drones, who know how to use every high-tech gadget except the ones you can earn a living with. White kids now have that “school is for other white people” attitude that destroyed black America.


22 posted on 10/10/2009 4:11:44 AM PDT by Carlos Martillo II (Guernica was a work of art...and I don't mean the painting.)
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To: GnuHere

To this woman’s credit, she blames herself. I’m not yet 40, and I’d been hearing for years that we weren’t going to enjoy the standard of living our parents did. They were right; we just didn’t want to hear it, and the moneylenders were happy to oblige. It was no accident that they tightened up bankruptcy eligibility a few years back; they saw the bubble coming...


23 posted on 10/10/2009 4:14:18 AM PDT by Carlos Martillo II (Guernica was a work of art...and I don't mean the painting.)
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To: GnuHere

Another story is that incomes have held, or maybe declined over the last twenty years. So, people are going further out on limbs. Like farmers borrowing more after bad years, thinking that next years bumper crops will pull them out. They double down.

Anyways, like we all know, the governments that tax, fine, fee, permit you, regulate you, cost you morning noon and night do not provide one single hour of finance education.

Heck, they don’t even do math hardly anymore.

Lots of kumbaya self esteem though.


24 posted on 10/10/2009 4:14:29 AM PDT by Leisler (It's going to be a hard, long winter)
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To: Carlos Martillo II

bump!


25 posted on 10/10/2009 4:15:29 AM PDT by Leisler (It's going to be a hard, long winter)
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To: GnuHere

I can answer you.

Kids expected to start out where their parents “ended up.”

Maybe we’re guilty of not explaining about those times when we stayed in the inlaws basement, saving up for a down payment.

These kids wake up one day, with the college degree their parents could never afford for themselves, and want to start THERE. And then move on....

Example: My sister was raised in the same home as I was. Lower middle class. We clipped coupons as a family; it was a matter of survival for us. My sister married someone wealthy, but she has never been able to abandon her upbringing, she still clips coupons and sends away for refunds. We were just raised like that.

Her daughter is one of privilige. She’s never known or heard of hard times in the family. We have (as a family) done a crappy job of educating her.

I was there to visit a couple of weeks ago, remarking that I was thinking of moving to Fort Worth. She said she’d like to live in Austin, because that’s where the liberals live.

No kidding.

(Confirming my theory that the longer the distance between the wealth “earners” and the wealth “receivers” will dictate the political bent.)


26 posted on 10/10/2009 4:21:10 AM PDT by Daisyjane69 (Michael Reagan: "Welcome back, Dad, even if you're wearing a dress and bearing children this time)
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To: Carlos Martillo II
She is only blaming herself to ingratiate herself to libtard sympathizers and those 'conservatives' who have closet libtard tendancies - e.g., misplaced compassion.

Frankly, I don't care if she's able to buy anything beyond a bottle of water again. At her financial state maybe she should start sucking up at a water fountain.

27 posted on 10/10/2009 4:26:56 AM PDT by Gaffer
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To: Daisyjane69

“this MUST become a classroom endeavor...”

I agree completely. It should be a requirement for graduation. On another note - they should also require a government class. It was required by my school to graduate. We learned about the branches of government, the separation of powers, etc. We even had to study the Constitution - and what it meant. I think it made my classmates and I better citizens.-—JM


28 posted on 10/10/2009 4:43:57 AM PDT by Jubal Madison (Sic Semper Tyrannis)
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To: Jubal Madison
Also classes in logic: reasoning, rhetoric, fallacies, etc.
It might provide a vaccine against the media propaganda and marketing hype that has resulted in a "created brand" occupying the White House.
29 posted on 10/10/2009 5:13:20 AM PDT by Sisku Hanne
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To: Daisyjane69

“Teach about checking accounts, credit cards. Teach about why payday loans suck. Explain how credit works.”

Explaining how it works is meaningless to teenagers.
They need concrete lessons such as being forced to spend a Saturday doing demeaning boring work. On Monday, they are handed 70 dollars for their labors. Then they should have to stand in line to file past a series of tables manned by representative government agencies. At the first table, for example, the IRS takes away 20 percent, the next table, FICA, etc. Be sure to include representative property, school, and other taxes.

When they are done they will be holding twenty or so dollars for their efforts. Declare they are wealthy and take another ten percent from them for the common good. Then take the money confiscated from them and buy pizza for another class.
Of course, to be fair, offer to let them buy their own from what they have left.


30 posted on 10/10/2009 5:16:09 AM PDT by bitterohiogunclinger (America held hostage - day 163)
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To: Carlos Martillo II
White kids now have that “school is for other white people” attitude that destroyed black America.

I don't think the concept is anything new. Smart kids were certainly ridiculed by their peers when I went to high school some 35 years ago. It has just been taken to a new level because of lack of parent/s oversight..

31 posted on 10/10/2009 5:22:48 AM PDT by EVO X
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To: TigerLikesRooster

This young lady made one bad decision after another.

She is not alone.

It is so sad.


32 posted on 10/10/2009 5:27:34 AM PDT by CIB-173RDABN
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To: Daisyjane69

Yes. My parents weren’t rich, my dad made good money but there were 5 kids to feed, so we didn’t have a lot of stuff.

It only took me a little while before I lived in a house like my parents, and when I had my kids after 10 years of earnings, we weren’t rich but we could buy anything we really wanted. That’s because we lived frugally, coupons, buying on sale, not taking expensive trips, shopping at thrift stores and yard sales, fixing things instead of buying new things.

But, my kids had anything they wanted. Expensive toys, video games, huge TV, cable, multiple computers. We drive brand-new cars (paid for, but the kids just know they aren’t clunkers).

We’ll send our kids to college, they’ll get out, and wonder why they can’t immediately buy season passes to theme parks and live in a 4-bedroom house in a nice neighborhood.

We are to blame, of course, but partly I think it’s just a cycle that’s hard to beat. If you really are rich, you pass that to your kids, and they really don’t need to ever worry about money, like the Kennedys.

But for most of us, it’s like our parents struggle, so we understand struggle, but because we live in a nation that makes it easy to succeed (or used to) our kids don’t struggle, they think it’s easy, and then they are set up to fail. Their kids will struggle, and maybe succeed, and then THEIR kids will start the cycle.

And the idle rich, mostly democrats, are trying to make sure that nobody else gets to be idle rich, by taxing inheritance, taxing businesses so it’s hard to maintain a family business, killing them with regulations.

They want everybody working for nameless corporations, so the people will hate their employers, and need government.


33 posted on 10/10/2009 5:35:55 AM PDT by CharlesWayneCT
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To: HEY4QDEMS

Bingo!


34 posted on 10/10/2009 5:40:30 AM PDT by TexasFreeper2009 (Obama lied, the economy died)
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To: CharlesWayneCT

I’m no fan of Warren Buffett (sp) but I’m neither an enemy of his, either.

But I sure do understand (now) his notion of leaving NOTHING to his offspring.


35 posted on 10/10/2009 5:42:12 AM PDT by Daisyjane69 (Michael Reagan: "Welcome back, Dad, even if you're wearing a dress and bearing children this time)
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To: Daisyjane69
Here, Daisy.

You might find it helpful to borrow this icon in the future.

No offense intended, I'm on *your* side in this one.

Cheers!

36 posted on 10/10/2009 6:16:52 AM PDT by grey_whiskers (The opinions are solely those of the author and are subject to change without notice.)
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To: bitterohiogunclinger
Do you know of any private schools we could institute this for?

Cheers!

37 posted on 10/10/2009 6:18:57 AM PDT by grey_whiskers (The opinions are solely those of the author and are subject to change without notice.)
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To: Sisku Hanne

I agree. What our children need most are not the latest technologies or even ideas. They need tools - and your suggestions are excellent ones. Our children are bright, if we give them the right tools, they will make good decisions. As it is now, we are taking these bright young people and turning them into useful idiots.-—JM


38 posted on 10/10/2009 6:34:49 AM PDT by Jubal Madison (Sic Semper Tyrannis)
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To: Daisyjane69

i live in NYC so yes,i understand all too well how “money stupid” people are.


39 posted on 10/10/2009 6:49:42 AM PDT by wiggen (Never in the history of our great country have the people had less representation than they do today)
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To: TigerLikesRooster

Americans’ inflated sense of entitlement has gotten us to this point.


40 posted on 10/10/2009 6:51:55 AM PDT by dfwgator
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To: TigerLikesRooster
Her biggest chunk of debt, $26,000, stems from student loans to pay for her two-year associate's degree from a community college -- loans now in the hands of collectors.

$26,000 to pay for an AA from a community college??

41 posted on 10/10/2009 7:58:16 AM PDT by truthkeeper ("Why oh why didn't I take the blue pill?")
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To: FreedomPoster

Kind of like ACORN is to democracy as people with no money is to bankster credit.


42 posted on 10/10/2009 8:30:09 AM PDT by SaraJohnson
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To: truthkeeper

People are idiots. And you generally can’t discharge student loan debt in a bankruptcy. It’s the new indentured servitude.


43 posted on 10/10/2009 11:01:23 AM PDT by FreedomPoster (No Representation without Taxation!)
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To: TigerLikesRooster
My emphasis:"The rise I see now is in food stamps, even from teenagers," Mr. Mustafa said.

What's wrong with this picture?

44 posted on 10/10/2009 11:01:50 AM PDT by Oatka ("A society of sheep must in time beget a government of wolves." –Bertrand de Jouvenel)
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