Tuesday, September 30, 2008

Into the Danger Zone

Alright, folks. Time to go "there"...into the dangerous realm of politics. More specifically, into the Economic Crisis we are currently facing.

Here's my disclaimer:
"It's my blog, I'll say what I want. You're welcome to disagree, and even to threaten to never read my blog again. It's your prerogative. But as usual, I am always up for lively debate and discussion, as I think through debate we can all maybe learn a different perspective or way of thinking. So, bring it on. Just do it publicly instead of sending me secret hate mail to my inbox, please."

Ok. With that disclaimer out of the way, I just want to ask... WHY is our President in denial? A POSSIBLE recession? C'mon! Folks, wake up and smell the decline of the dollar!

On the subject of bailouts, I want to start with a little story...
Y'all don't hear me talk much of my own family. I have one, but the relations have always been a bit strained, especially since I had a bit of a rebellious streak. That rebellious streak didn't mesh well with both of my parents being military officers, and, well, you get the gist.
I'm still the proverbial "black sheep", and while we all "make nice", there is a certain closeness lacking in our family.
It's ok. Really. I've had plenty of therapy.
And it wasn't all bad. My parents did actually manage to teach me a handful of life lessons.
Which brings be back to the bailout discussion.

Once upon a time, I was a really dumb young lady. I racked up a lot of debt, bought things I didn't need and couldn't afford, and even set priorities in life like, "Cigarettes and booze before groceries and rent". Really, I wasn't so different than many other Americans or Congressmen who don't understand what a budget is.
Well, I got myself into a world of hurt. I was robbing Peter to pay Paul, and when my credit cards were all maxxed out, I needed a way to buy groceries. I went to my own "government" (good ol' mom and dad) and asked for a bailout.
Well, they gave me one. It had lots of rules like, "Don't ever ask for another dime", "Now you'll have to figure out how to pay for your own college tuition if you ever want to g and make something of yourself", and "Stop being so stupid, stupid!"
The rules didn't matter. I was getting some cash. Economic Crisis solved!
Well, that (and the money) lasted about a week. I was responsible with about half of it, and payed down a credit card. The other half, I bought some things that I absolutely "needed", and then took a little to celebrate being more economically sound. The problem was that very soon after that, the credit cards were maxxed out again, I needed groceries, and I got a life lesson from the "government" (mom and dad) that the Parental Reserve was officially closed.
I think my mom's actual quote was, "Hmm. Well, don't the door hit you in the hiney on the way out." And dad even offered me a good sized cardboard box, should I need it for a residence.

Faced with my new, and much more serious Economic Crisis, I had to figure out what to do. To make a very long story (about 4 more years of Economic Stupidity) short, trying to make things better by taking out more debt, running away from debt, and attempting to ignore creditors while begging my parents for money they wouldn't send landed me in Bankruptcy Court at 23 years old.
Talk about embarrassing.
Even Bankruptcy Court did not ultimately end my stupidity, though it did slow it down a good bit. But only because it's hard to get credit cards when people see you've filed bankruptcy.

Fast forward a few more years. Realizing I was now "up the creek (you know which one) without a paddle", I started busting my butt to do something about it. I did eventually put myself through school for my paramedic degree (on full scholarship, thank you!). With that degree, I started working crazy long hours and paying off the people I owed and finally learning how to rebuild my credit. I managed to buy a house (small and in a questionable neighborhood, but it was mine!), decided it would be better to drive a little beater than a spiffy car with a payment, and that there were things I could live without in order to truly afford life on my own.
When my husband and I got married, we both came into it with a little bit of debt (about $15,000). My husband had promised me that when we paid our debts off, we could start having kids. THAT was motivation, buddy.
I started cutting our budget to the bare bones. We gave up bottled water and started drinking tap water when I discovered we spent $1500 a year on bottled water, and that was $1500 closer to having a baby that I could get. We started to reduce, reuse, and recycle not for saving the earth, but for getting more debt paid off so I could have a baby before my biological clock imploded. I worked insane amounts of overtime at my job (upwards of 110 hours a week), as did my husband.
Amazingly enough, within 5 months, we were out of debt, except for our home mortgage. The following month, I was pregnant.
We have since continued our economic overhaul, continuing to see what we can and can't live without, preserving our resources, and finding out how much freedom there is in being fiscally responsible.
There's a lot of pride there.

I share this story to say this:
Economic Bailouts don't work. When people have to work hard to make it work, THAT works.
Our current situation in our economy is the fault of people making stupid decisions.
It STARTS with people who want more than they can afford, and way more than they actually need. The "American Dream" is no longer a space (no matter what size) to call your own and some economic freedom, it's having the biggest, fastest, best, and most of whatever everyone else has.
THAT stupidity is followed by banks and businesses extending credit to people who 1) don't deserve it, and 2) can't afford as much as the bank is willing to give them.

So, WHY are we surprised we are in the state of affairs that we are in? How is America's situation any different than my own stupidity as a younger woman? Why in the world do we think throwing money at the situation is going to save us? What it IS going to do is lure us into a false sense of security. Make no mistake, friends. The government wants us to FEEL better about the situation and continue spending money we don't have and making stupid financial decisions, until we find ourselves in a much worse situation than this. Only the government is hoping that it won't get worse.

I don't consider my parents to be stupid people. Quite the contrary. But I will say that it was probably not a SMART decision to bail me out. I'm sure my parents, like the government, hoped the money would help and that I would magically become smarter and not make those same- or stupider mistakes again.

Maybe I'm just a big jerk, but MY proposal is this: Make America live out the consequences of their stupid decisions.
Yeah, I know, that means you still won't be able to sell your houses or afford your mortgages. That means you'll have to live with foreclosures on your credit report. That means banks will go bankrupt and all kinds of chaos in your life will ensue.
But you know what?
It's survivable.
Trust me. I know. From experience.
And not only is it possible to survive without being bailed out, when we DO recover (and we will. We're America for goodness sake!), the pride you will have in your own lives, your own country, and your ability will surpass any momentary joy you will get out of seeing Uncle Sam pay your way out.

On that note, Beans is up and ready to play. So I have to stop my ranting and raving for now and go teach her the value of a dollar, while it still has some value.

Until next time,
Happy Moose Trails!

5 comments:

MIZLIZ said...

AMEN !!!!

Bevy said...

too true - write your reps & senators in Congress - wait - you probably have already! :) I've been writing and calling them alot the last few days...

Susan Stevenson said...

Great blog entry, Nicole! I want to add another 'spin' I've heard made about this bailout - and why we NEED it:

A)Those who can't afford their mortgage will lose their homes to foreclosure. The more homes that go into foreclosure in a neighborhood, the less value the existing homes with paying owners. (Obviously this concerns me, as I own a home. However, I don't expect to sell my house before 8-10 years down the road, so my hope is that values will continue to go up - even if slowly)

B)The more homes foreclosed on, the less homes paying property taxes. The less property tax collected, the less money available to run the city. Which leads to either increasing the taxes on the homeowners who are still paying their taxes, or reducing city services such as fire, police, ambulance, bus systems, etc.

OK, so point B doesn't make me very happy because why should I be paying MORE taxes on a home that has LOST value?

BUT... giving money to the banks who mortgaged these homes, and in many cases - who had no right to even LEND money to these people because it was above their means - doesn't mean they're going to turn around and somehow keep the houses from being foreclosed on. They might offer some scam incentive (we'll lower your interest rate and monthly payment, but we'll make your mortgage term 40 years instead of 30) to home owners in a bind, but that does nothing to insure that those homeowners will be able to pay their mortgage for 40 years!

When we bought our house, the mortgage company pre-qualified us for a loan that was $75,000 MORE than what we paid for this house. We could have popped the champagne corks and went all out, but we didn't. We bought a house that my husband's military pension check would cover in full (to include utilities).

Why didn't we take the money offered? Because we learned NOT to live beyond our means! It's too bad, as you wrote so eloquently, that folks who have been down the path of financial ruin don't learn any lessons from that and make the necessary changes - as you and I have.

(Sorry to get so long-winded *grin*)

Renee G said...

I agree with you...no secret nasty email from me! ha enjoy your blog. I would love to live in Alaska, after having grown up in Montana and am now in Kansas....I miss the mountains. I have a good friend up in Anderson AK which is close to fairbanks and she is always telling me to move up! But alas my hubby refuses! Said it would be a great place to visit but not to live! So i enjoy your stories!

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