| | I'm not totally up on what a "sub-prime" loan is, but I know that is
has something to do with people who buy houses that they can't afford
and wind up defaulting on their mortgages. I'm also not completely sure
how the national debt works, but I do know that the word "debt" means
you have borrowed beyond your natural means to pay for something. And
I'm not entirely certain how government budget deficits work, but I
know that deficit occurs when you don't budget enough money to cover
your expenses.
I only bring all this up because of a news report
I heard on the way in to work this morning, which described how "The
Fed" (God, I hate it when people shorten the names of things...) was
about to slash interest rates again to try and boost the housing
market. Apparently, part of this equation involves people who have
gotten in over their heads financially being able to take advantage of
lower interest rates to get back on their feet. The real kicker of this
story, though, came when they began discussing the effects of this drop
on those who had actually saved their money and were looking to invest
it in options like CDs (not compact discs, just in case you were
wondering). If you were looking to invest, the report said, you'd
better do it now, before all the rates go down and diminish your
returns (or something like that. I was an English major, for Pete's
sake.)
So, in essence, what this report is saying is, "If you've
been stupid with your money and gotten in over your head, here's good
news for you! If you've been responsible and saved up and want to
invest, you're going to have to sacrifice for the greater good of these
stupid people." Actually, stupid is probably too strong a word. I mean,
my wife and I (unfortunately) accumulated some credit card over the
holidays. I realize how quickly someone can lose focus and wind up in
debt. On the other hand, our credit card debt is going to be gone by
the end of the month, and we're still making our house payments on
time. Have I had help here and there? Yes. From the government? No.
In
a world where fiscal responsibility seems to be dwindling, the
government continues to be the worst offender. If I had billions of
dollars in debt, I'd be in jail, not trying to pass legislation that
would give out free money to everybody and their brother. I live in a
state that has a multi-million dollar budget deficit, but no one has
stood up and said, "We were fiscally irresponsible. We promised too
many things that we didn't have enough money for." I, on the other
hand, get charged an extra fee if I keep my DVD rental an extra day.
I'm
torn over this "economic stimulus" package. On the one hand, I could
really use the money (Who couldn't?). On the other hand, how is this
really any different than Hillary Clinton wanting the government to pay
for everybody's health care? Why is one "socialism" and the other a
boost to the economy? Either way, it's the government giving out money
it really doesn't have, because it owes so much to the national
deficit.
Have we gone too far to turn back? I certainly hope
not. It's became frighteningly apparent, though, that just because
you're a senator or congressman, you don't necessarily have a good
grasp on financial planning. Maybe a debtless world is a thing of the
past, but we can at least take some steps to whittle it down. If not,
we're going to have to compensate for the over-spenders more and more,
while the savers are going to have to keep paying the price. |
| | Posted 1/29/2008 5:14 PM - 59 Views - 0 eProps - 0 comments
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