Perhaps I’m showing my age as I rapidly approach the half-century mark. But I clearly recall a time when there was shame attached to being in debt. I grew up in a working-class neighborhood of modest homes at a time when people never seemed to move. It was a major event if someone moved in or out and there was constant whispering about the couple who ultimately divorced. Occasionally there would even be a rumor that someone was having problems and needed to take out a second mortgage. Gasp! Oh, the horror and the shame!
That was back in the time before credit cards were rampant and you actually had to go to the bank to get cash (for you younger ones, there was a prehistoric time when ATM cards didn’t exist). People worked till 5pm but banks closed at 3 o’clock. You actually had to plan your spending so you wouldn’t run out of cash on a weekend since the banks were closed. Perhaps people weren’t as fiscally irresponsible since they needed to be somewhat conscious about their spending.
Fast-forward a few decades and the picture is very different. Many of the financial problems we have today can be traced to easy credit and fog-a-mirror mortgages. People used their home equity as their personal piggy bank thinking the boom would never end. It seems that people didn’t learn to be financially responsible because it wasn’t necessary. We’ve gone from the “save for what you want” of a generation past, to the “I need, I want, I have to have it now” of today.
Lather, Rinse, Repeat
Credit providers have been extremely successful in their marketing. Today people don’t seem to stop and think. Take that 0%, easy finance plan for that major purchase, it’s the same as cash! Why buy a $15,000 car when you can lease a $30,000 car for the same payment? Owe more on your old car than the trade-in value? No problem, we’ll just roll the remaining balance into the payments on the new car. Have you run your credit card debt up into the stratosphere? No problem, we’ll just refinance for the eighth time and pay those bills off yet again.
So what do you do after you’ve done the financial version of “lather, rinse, repeat” so many times that your payments now exceed what you earn every month? Easy! We’ll just declare bankruptcy. There are so many lawyers out there advertising for this business that it is no longer the scarlet letter it once was. The “B” word was once whispered because there was such a stigma attached to it. Now filing for bankruptcy is so open that no one seems to care.
What Happened To Accountability?
It seems as if we’ve become a nation of victims. So few people take responsibility for their own actions. “It’s not my fault, it was the greedy___ (fill in the blank).” It seems everyone is out to blame the real estate agent, mortgage broker, salesman, etc. Now these “victims” are waiting for the Government to bail them out. The Government, a picture of fiscal responsibility itself, is only too happy to oblige. Of course, the people who live within their means and use debt responsibly get nothing, but what else is new?
There once was a time when defaulting on a debt could put you in jail. The Federal Government abolished debtor’s prison in 1833. Maybe it’s time to bring it back.
I love to go to Washington – if only to be near my money. – Bob Hope