Debt Will Kill

Posted on: Tuesday, November 11th, 2008
Posted in: Spendology, Work/Life Hacking, Blog | Leave a comment

Debt news is everywhere.  Are not we all forever indebted?

  • 10 Percentage of Americans who are taking out more cash advances on their credit cards than in the past.
  • 20 Percentage of respondents who indicate they are “sometimes” or “always” unable to pay their credit card and/or loan balances each month.
  • 8 Percentage who say they can make only the minimum payment required.
  • Source: Standard and Poor’s ExecuComp

The good news: These numbers, floating in air, don’t mean much without something to compare them to.

The bad news: Only a dummy would see any bright side to those numbers, with or without something to compare them to.

Folks, we are finally getting spanked for our squandering ways. Sure, it’s just numbers on paper. And so is money itself—and that was before computers made money a “virtual” concept and paper an ungreen commodity. But some big, fat RESET button in the fiscal sky is getting hit violently.

Ever see a thug play pinball? It’s not pretty. It usually breaks the machine, and then the rest of us can’t play our game with touch and intuition any more. Not until it gets fixed, which, of course, most pinball games don’t.

Who’s gonna pay for this stuff?

  • The bailout(s)?
  • The Fannie Mae and Freddie Mac bailout programs announced today (which failed to make stocks rally)?
  • The car company bailouts?
  • Overall government debt?
  • Stimulus policies?
  • A new New Deal?
  • Evermore credit card debt—as illustrated above?

In the old days, you could find economists who would say things like, “Government debt doesn’t matter, because it’s only money a people owes to itself.” That argument doesn’t work not, though. The world is one big, broken piggy bank. And the U.S. owes gazillions to other countries. Do we expect them to give, forgive and forget?

No. So who’s gonna pay? You know who: Anybody with any cash. Anyone with taxable income. Anybody with a decent job and investing habits.

Bummer—if you should be so blessed, but that’s what you get for being “in the black.”
Nothing new about that, of course, but the stakes keep getting higher. Expect higher taxes, pathetic interest rates, little appreciation on your house and other hard assets, a stock market that will take years to get back to its recent highs, and possibly inflation. Stagflation. Deflation. Systemic, worldwide flatulence with not enough Gas-X to go around.

What’s this got to do with Sabbaticals? Plenty. If you’re waiting to get rich, or pay off all your debt, or have time to burn, it may never happen. Only you know. Or not.

Get out of town, while you still can. For now, you may have to overlook the debt. The banks. The government. The global meltdown that may or may not produce a kinder, gentler, stronger planet. You may have to stop hugging your dayjob, even though these days they are things worth holding onto.

Worry about YOU. Find a way to make time, take time, and let go of the numbers on paper that are crippling too many lives. Even if you’re about to file bankruptcy and lose your house, there may be a way. Life goes on. All you have is today, this moment, this breath.

As for the crisis? As usual, the experts and politicians are united in this one opinion: This too shall pass.

Have a sunny day.

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