I don’t think accumulating personal debt is a sign of incompetence. When the cost of living increases, wages stagnate, and jobs are lost, the accumulation of personal debt seems like the norm. It seems like the people who aren’t in debt or mortgage trouble seem to think their financial position was attained solely through their own hard work and decisionmaking, while discounting the role of the government, society, and just plain luck.
Yeah, I’ve just been lucky, living within my means even when it meant rarely eating out, taking modest vacations, driving modest cars, deciding I’d rather save for my kids’ educations than be the first on my block with cable premium packages and cell phones, and the like. And everyone who piled up debt on their credit cards and bought houses and cars that they could only afford if the best case scenario held out were darned unlucky. :rolleyes:
I was thinking the other day, how you no longer hear the ads you used to which urged people to use credit to redo their kitchen or take a vacation. Silly, lucky me, I always thought the idea of borrowing money to take a vacation the height of irresponsibility.
Nor I, necessarily.
Think about it: if you got an economic stimulus check and used it as collateral for a loan that you used to start your own business, it’s hard to classify that as “incompetence.”
Its not conclusive proof - there are a number of variables at play - just like having wealth is no proof that you are competent. But I do admit that I’m don’t think highly of the competence of people now wondering how they are going to pay all that debt off who have iPhones and Coach purses went to Hawaii last year and Vail the year before that and drive $40k cars. Which is what is happening in my neighborhood.
not trying to be snarky here but have the pubs ever really been for real tax breaks for anyone who wasnt already filthy rich?
I agree it’s an issue. The point is to not let it be the issue. Keep it in proper perspective. I think the problem of imagined entitlement and privilege is a big problem. I heard a discussion on NPR and in this discussion one lady asked . Where is the leadership? Very appropriate question in cooperate leadership and in politics. Jon talked about incentives and they mentioned that executive rewards should be linked to 3,4, or 5 year performance rather than quarterly or annually so those dick heads don’t get rewarded for creating a bubble that can’t sustain itself. I’m disgusted by those who try to defend it. Rudy Gulliani? STFU Rudy.
I think a similar thing exists in politics and those that work in and around Washington. They seem to feel they deserve to be insulated from the repercussions of their bad decisions. They seem to feel it’s only proper business as usual to compromise their ethics and responsibilities to build their personal fortune and if others get hurt “oops sorry, that’s just how it works” It’s up to us to grab them by the scruff of the neck and say “Not anymore fuck wad. Here’s the door, don’t come back” Blagovich is a fucking caricature of that very issue.
I’ll confess ignorance on this. I think the point was that some more spending money for lots of people {since everyone pays fica} and a change in structure, has the potential to put a lot of money into play.
And the problem isn’t just personal debt. On NPR a business man called in and spoke briefly of the several successful businesses he has built and sold. Businesses that employ people. He needs a loan for operating capital in the business he’s currently building and even given his good record, he can’t get it.
Everybody owes on mortgages. It is the people who are behind, or who will be from a balloon, who are the problem. As for credit card debt, that’s a moral hazard of the worst sort. Neither will stimulate spending.
I thought he was way wrong on this. I doubt the president is spending a lot of time ranting at these guys. However, by making the statement a lot of people will consider him to be on their side and not on Wall Street’s side. Imagine if he refused to condemn the bonuses. A lot of what FDR did in the first 100 days was to tell people that he cared about them, unlike Hoover. Whether or not he fixed the Depression, my parents and grandparents idolized him.
Would the money being paid into the trust fund, or rather to those on Social Security, be replaced? I fail to see how this is any different from the tax cut which is proposed.
Now this sounded like a good idea to me. First, it is the equivalent of refinancing, which people do all the time. Second, it corrects the injustice of people getting snookered into taking bad subprimes. Third, it is a continuing benefit, not a one time payment which tends to go into savings. Fourth, it reduces the moral hazard, since people still have to pay. It might have to be combined with renegotiation of the principle balance, but, with that, it should allow the mortgage backed securities to get priced again. It will cost the banks money, but that is what the first bailout should have been used for.
This doesn’t eliminate the need for the infrastructure piece, since someone who is unemployed will have trouble paying even 4.5% interest. But stopping the decline in the housing market, re-establishing a market for mortgage backed securities, and providing jobs will help a lot.
Then when they file for bankruptcy they say, “It was my doctor bills that made me go bankrupt. That’s the problem: healthcare is too expensive!” I hear this canard all the time. Here’s the innocent patient, chugging along just fine on the ragged edge of disaster, with his HDTV on a payment plan, his whole family with cell phones, new car, kids have orthodontics, he’s got a new motorcycle, vacation on his credit card, and then he gets into a car accident. Suddenly it’s the doctor’s fault for billing too much.
No, the problem is that they don’t budget, they don’t save, and they spend stupidly.
It is exceptionally difficult to self-insure for medical bills. They get out of control really, really fast. The average cost of just delivering a baby is over $7,700 (near $11,000 for a c-section) and that assumes everything goes normally with no complications. My dad, in the last year of his life, chalked up a bit over $1 million in medical bills. My girl friend’s twin brother contracted AIDS from a blood transfusion when he was an infant. Medical bills bankrupted her parents (who were in the lower middle class income bracket). How were they to budget and plan for that?
I do not know about you but without insurance most people would find just having a baby as expensive and a serious illness/injury can bankrupt you in nothing flat unless you are very wealthy.
Mind you, I’m not saying that medical expenses aren’t outrageous: they are. Some perspective on the public’s typical spending habits (and, to be frank, sue-the-doctor habits) is needed.
No they won’t. I think it was proposed as an alternative to what has actually happened. Rather than just hand hundreds of billions to the banks let’s give it to those in debt with the stipulation that they use it to pay debt. That way the banks still get billions *and * consumer debt is eased. What’s happened is the banks get billions and consumers still owe billions.
Which I assume didn’t put any bread on the table. I’m not discounting the power of a positive attitude. I do believe it’s very helpful if it is accompanied by real efforts at solutions. I got the impression Lindsey was only saying “Yes address that issue because it’s a real one, but don’t let it be a substitute for the larger problem” Don’t leave out the substance for the sake of the good communication label.
Me neither but they didn’t elaborate. I think it’s related to everybody pays fica but not everybody pays income tax. Also reducing fica gives the employer some relief as well.
I haven’t heard one financial spokesperson or politician address this. Why wasn’t/isn’t this a good choice? The silence indicates to me that the answer is exactly what you just said. It would cost the banks too much money. Instead of that everybody yelled fire and they got billions and are still owed billions. I find it pretty discouraging in our new leadership.
Right. Those who are losing their jobs probably can’t be rescued by refinancing although I find it hard to believe there aren’t creative solutions. I know several people who rented rooms etc to help pay the mortgage. I support the creation of jobs through rebuilding our infrastructure providing American citizens actually get the jobs.
It isn’t the self insurance that I’m talking about…that I understand - even when you are insured, medical bills can wipe out the most competent people. Its the lack of planning for any sort of issue. I know people who were flirting with bankruptcy last year because gas prices had doubled and groceries got more expensive - which is understandable if you’ve been living on the edge to start with - but which is not exactly a sign of competence when you are wearing $200 shoes…
Well, maybe people should consider their lack of insurance before deciding to have a baby or carry a pregnancy to term . . .
And maybe someone without insurance ought not be provided $1 million in health care in their last year of their lives.
Having said that, I’m a huge supporter of universal health care - tho not for unlimited care for the critically ill, fertilization treatments, etc.
Pregnancies happen often enough regardless of planning. And only people who can afford a pregnancy should get pregnant? While one would hope people are responsible and aware of the impact (financial and otherwise) of having a child there is something decidedly creepy to think only people with the financial means should do so.
Maybe not but again are you suggesting if you can afford it (insured or just very wealthy) then you get good health care but if you can’t (maybe you were laid off) then just stay at home and die?
Anyway, the point was more to note costs and how quickly they can accrue with medical bills such that lacking insurance most anyone is SOL.
I was concentrating on stuff that would help. Dropping the money from airplanes would probably have stimulated the economy more than what Paulson did.
He appeared to be downplaying the solution part, almost echoing the Obama is nothing but a good speaker criticism from the beginning of the campaign. Maybe because he worked for such a crappy communicator he didn’t appreciate the importance of this. A lot of our problem is fear. A lot of people have cut back spending even when their jobs are pretty safe, and that just makes the problem worse. Getting people in the mood to spend again would be worth hundreds of billions of bailout money.
I forgot the employer part. That doubles the problem. It might reduce layoffs, but more money to spend would do a much better job. If the employer savings goes to the bottom line, and in the bank, it is not going to help any.
I think it might be in the Republican Senate proposal (which is a lot less brain dead than the Republican House proposal) and I hope it is what Obama meant when he said the proposals were close.
It’s a lousy idea because it doesn’t solve the fundamental problem - poor decision-making caused by financial players driven by a short-term focus and disregard for risk - and it rewards bad behaviour, setting up an expectation that something similar will happen again down the road.
You can’t let the banks fail, because that will exacerbate the situation, but you need to make offers of credit conditional upon banks paying the price for their actions - typically through needing to access that credit at a price or suffering equity dilution, and by sacking the decision-makers who got the bank into its mess.
Giving everyone gobs of cash just alleviates the symptoms while fuelling the underlying problem.
This may be a shock to you, but tax breaks do not solve every problem known to mankind. Really.
Practically nobody can save enough money to withstand a serious illness. Most bankruptcies the last decade were a result of medical bills. I knew a guy who’s wife got brain cancer. Before she died it cost over a million dollars in medical expenses. You would have had that money saved, but most of the rest of us would not. The uncovered part cost him everything. He went totally broke.
http://www.bcsalliance.com/y_debt_medical.html
Here’s a guy on NPR this morning who thinks that gigantic executive pay bonuses are encouraging these execs to take bad risks. If things go great, big bonuses. If things go badly, hey I still get a fat severance package.