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A MATTER OF OPINION: Debt and taxes

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By Robin Bass

Are you scared yet by the financial crisis on Wall Street? Consider this, instead of being frightened by the turmoil, arm yourself with information – not from 30 second news bites either, but from reading everything you can in newspapers, on the Internet and by watching in-depth news programs.

Now, I know reading news stories about the financial status of our country can be daunting. Heck, I write for a living and sometimes find myself nodding off before the third paragraph. But instead of buying into the hype, we have to take the time to learn for ourselves when the time is to truly panic. Don’t just take Treasury Secretary Henry Paulson’s word for it. Just the simple fact that he wants this bail out package to move so fast should send up the red flags.

Instead of worrying, I’ve found myself spending most of my time being angry. I’m angry that our government creates programs with my tax money to help people get into house loans that they can’t afford. I’m angry that greedy mortage companies have compounded the current financial crisis with their creative loaning practices. And I’m angry that it will be my tax money and the tax money of my great-grandchildren that will be footing the bill to bail out all these bad decisions to the tune of $700 billion.

But most of all I’m angry with myself for buying into a fantasy called the American Dream. You know, the one that involves owning two new cars and a big house in the suburbs filled with HDTVs, stainless-steel appliances and whatever else the proverbial Jones have.

I don’t have any of that stuff, but somewhere deep inside, a small part of me believes I need it. I want to root out that self-indulgent little part of my brain and back over it with my eight-year-old Ford – put it in forward and run over it again.

I think we all need a big dose of contentment these days. Quit using second mortgages to finance $40,000 cars. Cut up and pay off credit cards. And, oh my gosh here’s a radical idea, save up money to buy something rather than signing up for 12 months no interest.

Take a look at these statistics:

• The average American with a credit file is responsible for $16,635 in debt, excluding mortages, according U.S. News and World Report, “The End of Credit Card Consumerism,” August 2008.

• Total U.S. consumer revolving debt reached $962 billion in May 2008, up from $879 billion at the end of 2006. About 98 percent of that debt was credit card debt, according to the U.S. Federal Reserve.

My parents never had credit cards and I’m willing to bet yours didn’t either. They taught us to save our money, spend it wisely and tithe 10 percent of our earnings each Sunday. So what happened?

The same thing that has happened to our financial market. We got greedy. We picked the immediate satisfaction of consumerism over common sense. Then when the bills came in, we stopped tithing because we couldn’t afford to give to God any more.

Like our own finances, our federal government is hurriedly trying to pass a bail out package that will sink this country even further into debt. Who will have to pay? Will it be some foreign government that we owe? Many of those questions will take some time to discover the answers, but in the meantime we all need to take a long hard look at our personal finances and possibly make some tough decisions.