Then and Now -- Debt
A huge change in the last 50 years is our individual and national attitude toward debt. It has come to be status quo instead of something we fear and avoid at all cost.
My parents had survived the Depression, but it left its mark on them. My father, in particular, saved his money with a vengeance. He didn’t buy anything he couldn’t pay for other than a house (for $8,000) in 1952. He paid cash for his cars. He never used his Mastercard, the one charge card he possessed. And he instilled a fear of debt so deep in me that I could never imagine being there.
Today’s generation of young people, for the most part, have a very different attitude toward debt. Many of them are hundreds of thousands of dollars in debt when they graduate from school, often carrying multiple school loans. They max out their credit cards. Some finally declare bankruptcy. But many simply accept their debt, not really letting it cause them too much angst.
Our country has evolved much the same attitude. When Bill Clinton left office, we were in great fiscal shape, actually showing a surplus. But those days are long gone as we dig ourselves out of multiple wars and economic woes. In reaction to our 3 trillion dollar deficit, we simply print more money and hope the world believes in the almighty dollar.
Instead of collective angst, we as a nation seem to be in collective denial about the fact that we are in a bad way and we sorely need to generate income, most obviously by taxing those with the most money who have been enjoying a relatively free ride for sometime now.
I don’t know how much longer this complacent attitude can go on before it really catches up with us. But I do know it eventually will if we don’t put our politics aside and figure out how to return to solvency.
posted by Barbara at 3:29 PM
3 Comments:
Barbara,
I love these "Then and Now" post ideas. I have to catch up on what I missed here - sorry to have been away but back to school does not allow me the same amount of free time. In first grade we are studying families "then and now" so you are in sync with us (and I may have given you an idea for another blog post :)
Debt makes me nervous too. I have a small amount on a credit card but even that bothers me. It is just too easy to charge things and it is encouraged in so many places. The tough part is remembering at the time of charging things that we actually have to pay for it at some point.
Hugs
Maybe it was from being around grandparents who lived through wars and the Depression, but I grew up knowing that money needed to be earned and saved. My mother worked as did my grandmother, and it was always assumed that I would go to college and do the same.
Credit was something one established and kept up, like personal reputation. The banks and credit were more tightly regulated, and it was harder to purchase so-called "Big Ticket" items unless one could offer proof of employment, good credit or cash in hand.
It is interesting that in one of your posts you mention Ayn Rand. She and her close personal friend, Alan Greenspan, have been proponents of less regulation. I believe that they are wrong. We have seen the greed and turmoil that that can bring in our financial sector. This is also a factor in continually rising prices for basic things like food. Healthcare and medicines have also become prohibitively expensive for growing numbers of individuals and families, something that our grandparents did not have to contend with. There are also growing numbers of people being priced out of technology and broad band. If more people are in debt and going bankrupt, it may be due to job loss but another variable to consider is that as a country, we tout a certain lifestyle that can carry with it a lot of debt, and for many now, this is considered normal.
I think that our economic woes are the tip of the iceberg, so to speak and that the scaling back that we must all do is in fact a new normal that many have never before encountered.
I believe that the middle class is being assaulted
from all directions and that we are well on our way to becoming a nation of extremes--on one end we have great wealth while on the other we have a growing underclass. Our schools, medical system and other institutions are in disarray and will continue to be so because our so-called leaders are clueless.
Other western nations pay much higher taxes and endure governmental regulation so that their medical and other systems remain accessible to their citizens. We would be wise to follow their example
and understand that we must pay for what we want.
Putting people back to work is fundamental toward protecting our tax base.
I wish I could be more optimistic.
Gary -- Sometimes I wish we could return to the days of no credit cards. They are entirely too convenient, especially for people who don't live by budgets or have a lot of willpower. The precursor to credit cards -- putting things on layaway -- was a much safer approach.
E -- I agree wholeheartedly with everything you have said. I too believe the return of a strong middle class is a big part of the solution. We simply must come to terms with the fact that we all may have to make sacrifices if we are to turn this thing around. The tax rates and gas prices in this country pale in comparison to those in European countries.
I can't wait to get to the part of the book that inspired this series of posts to see what the authors recommend as solutions for our national problems.
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