Our Economy

So how are we going to solve the current issues with our economy? I think as McCain said, the fundamentals are okay. The way our economy is supposed to work is fine. No one wants to see us move to socialism!

Personally I think the materialistic mentality of today's society is much to blame for the current problems. One need only look around, or listen to conversations at the water-cooler to know where the problem is.

Growing up, my parents taught me that one should never spend more than 30% of their income towards housing. That means if all you can afford is a smaller home, that's what you get. If it means your kids share a room, that's what they do. If it means living in a lower-priced area (assuming you can find a comparable job there), then you do it.

It does NOT mean that everyone deserves to live in a "McMansion". In fact most of us have far more home than we really need. And yes, I include myself in that. But we're spending far less than my parents taught me towards our mortgage each month. So many who are buying these homes (and even smaller ones too) are mortgaging far more than they really can afford. And for space that they really don't need.

Remember, we're not talking about "wants" or "what we think we're entitled to". We're talking about NEEDS.

Our society is incredibly focused on having the latest-and-greatest technology, no matter what the cost. People spend thousands of dollars on a tv. On a silly TELEVISION! And then there are the add-ons. Digital cable, TiVo, video game systems, and surround-sound stereos.

Then every time a new cellphone comes out, everyone rushes to buy it. The latest iPhone or Blackberry. And don't forget the required monthly fees to use the things.

The list of technological "wants" has grown so huge, and people really seem convinced that they "need" them or are "entitled" to them! No matter what the cost!

So how do they pay for it? They don't! They put it on those wonderful little plastic credit cards. Another wonderful lesson my parents taught me. Treat credit cards like cash. If you can't pay off the whole thing every month, you can't afford it. And yet so many people carry tens of thousands of dollars in credit card debt because they really "need" everything they buy!

Then their credit score drops, and they still don't learn. They still think they deserve the big house, so they agree to whatever mortgage they are offered to get what they "want". Lenders who seem to have the intelligence of a fly and the morals of a snake rush to sign them up for whatever they buyer will put their signature to.

And so it goes. People get more and more in debt and can't make their payments. Interest rates fluctuate, and then they wind up in foreclosure. The glut of available houses grows, and the banks can't sell them for what the mortgages were worth.

The banks fail, the people are broke, and everyone looks to the government to save the day.

Wrong. Yes, I realize that a bailout may be necessary. But it shouldn't be. We should never have gotten in to this mess to begin with. People need to start living within their means, no matter what those means are. Builders should design reasonable homes in the community, not just the McMansions. Lenders should only lend money to those who can really afford to repay the loans. Banks should be held accountable for the decisions they make.

However it starts with the people. I'm a bit tired of sticking to our family budget only to have to bail out others who don't stick to theirs. We make sound decisions so that we don't get ourselves in these kinds of financial messes. We don't have digital cable, TiVo, game systems, iPods, iPhones, Blackberries, fancy furniture or designer clothes.

But we're not asking anyone else to bail us out either.