Trying to raise my kids the best I can

Sunday, September 14, 2008

More blogging about the end of America

I'm actually a very logical, sensible person. Which is why my concerns are particularly dire. I'm really, really concerned about the economic state of America. As individuals we, and also our government, are living on credit. Debt.

My family has lived an interesting experiment the past year in which we have lived within our means -with no credit lines. "What's so interesting about that?" you ask. Well. We've been living in poverty during this time even though my husband earns three times the minimum wage. Let me put this another way... If your average undereducated inner-city newlyweds both work minimum wage jobs they will earn even less than my husband does. And that amount falls hugely short of the amount needed to sustain a family. A willingness to work hard is no longer enough to not go hungry.

This might sound like an exaggeration. I often looked at others around me and wonder "how are they affording that?" And the answer is that the majority our population is living on credit. In the book, Maxed Out, it says...

"the best definition I have heard [of preferred customer]t-and this is from a vice-president of MasterCard-is an individual who has a "taste for credit," i.e., someone "willing to make monthly payments-forever." Now I know why, if I fail to pay off my balance in full, my credit limit is increased. I know why the world's largest bank is trolling the poorest back roads of Mississippi looking for new business."

"Credit is a two tiered system. There are those who pay interest and those who collect it. but it has always been thus. What has changed is the marketing of credit, the notion that credit is not a tool but a lifestyle. The financial industry spends vast sums of money spreading the myth that debt is good, that what matters is a good credit score, approval, as though that approval still means what it did a generation ago when denial was the norm."

"It is disturbing enough to many of us that the largest institutions in our culture spread this propaganda every second of every day- that the taste for credit is being systematically cultivated into a voracious appetite among those who can least afford it. But it is even more disturbing that an even larger institution, one that has traditionally provided checks and balances over exactly such abuses of power. The Unites States government."

"For the past forty years, the federal government has helped private coporations sell debt to its citizens and guaranteed them a profit... On its face, guaranteeing bank profits seems an absurd public policy in a free-market., capitalist economy like ours. Why would the federal government assume trillions of dollars of risk on behalf of a hugely profitable industry whose purpose is to shoulder exactly that kind of risk? Or, put another way, why would the federal government give banks an incentive to make risky loans? The answer becomes abundantly clear when one reviews any State of the Union speech of the past twenty five years. Guaranteeing private debt, rather than paying for goods like education (as do many other industrialized nations), saves politicians from making risky choices while allowing them to toss around what sound like very impressive achievements: increases in home "ownership", particularly among minority groups, leaps in college enrollment, particularly among the disadvantaged, a wave of entrepreneurship, and so on".

Republicans are just as guilty (if not more so) than Democrats in this mess. As mentioned in the last quote, they oppose paying for education and healthcare for the masses, instead, deciding it's better to guarantee loans to the masses for those necessities. And spending on National Defense is on credit too...

"Previously, all purchase orders had been routed through a central procurement office, where they were reviewed and approved. Whether you needed a tank or a roll of toilet paper, this was the procedure. Getting supplies often took weeks, sometimes months. It was tedious, time-consuming, and annoying. It wasted paper. It felt draconian in a world where one is accustomed to getting what one wants instantaneously. So the Pentagon had decided that government should imitate business and that soldiers should have expense accounts. What they had neglected to install were the checks and balances. Indeed, what is commonly referred to as "fraud protection" was entirely out-sourced to the credit card issuer, Bank of America which tended to be very liberal with its credit limits and very tight with questions. After all, countries, particularly the USA, don't go bankrupt."

Conclusion: OK. I've delved into the argument that America is going broke. And I define that, not so much by our national deficit which just doubled last month with our Fannie Mae bailout, but rather by the widening fiscal gap between future promises and future income. What are the literal ramifications of this? I'm not exactly sure. At some point, I fear, we face another depression. I don't know when and I don't know how exactly our world domination will change hands to China and Saudi Arabia and other countries that are currently paying cash for everything. But I am fairly convinced that this will happen. That it is inevitable, with the course we are following.

How to protect yourself: Living within your means. Particularly avoiding school loans, which are the only thing you can't declare bankruptcy on. Rent as opposed to buy your house, which is probably only going to go down in value. In fact, when that moment in time comes when the world realizes that America can't pay back its debts our currency won't be worth much either. So investing in tangible items like gold is probably a safer bet. It's also better to invest in intangible things. Put your time and energy into your children and skills, trade, education, and good food and health care which are investments in your future health. The most important intangible, reminds Jesus, is the kingdom of heaven:

Matthew 6:19 ""Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal."

This blog post sounds very doom and gloom. But I see the big picture. And it doesn't end with another Great Depression. No. It ends with a new world order. With Jesus in charge. And the Devil in a pit of hell. "Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more important than food, and the body more important than clothes?"
Matthew 6:24-26

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  • At 6:30 AM, Anonymous Anonymous said…

    Wow Deena! That was very well written. I'm impressed :) (Beth)


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