Ketchup & Musings

It's been over two weeks since I posted anything. I've been pretty much glued to the radio and Internet regarding the "credit crisis" and the financial bailout, partially because I have an overwhelmingly nerdy interest in the subject and partially because I am trying to explain the enormity of it to my ESL students.

Here's what really bugs me about it and I am hoping someone will eventually explain it to me-since when is it sound policy to operate an entire economy on credit?

Since I truly don't want to sound bias in this analysis, I have to admit that I paid no attention to politics until 2001 when I moved to the Washington D.C. area and had to listen to a 24-hour news station in order to receive constant traffic alerts during my 4o-90 minute commute. So I've really only paid attention since Bush has been in office. But I do not understand why the only economic advice we were given since 9/11 was to go out and spend money-I understand that spending money can help the economy, but it helps no one if you don't actually have the money to spend.

It seems as if this policy filtered up (or down?) throughout the entire government. We have a huge deficit. Whereas we should have invested the surplus left by the Clinton administration into new technologies and innovations which would have kept as a world leader, we blew it, just like a college kid blows their credit as soon as they walk onto campus and get handed a piece of plastic and a lousy cotton t-shirt. Wars, tax rebates, etc...where has it gone?

If you don't have the money to buy something, don't buy it. There. It's pretty simple.

Wanna buy a house? Buy what you can afford. Can't? Then don't buy.

Can't pay off the credit card bill every month? Then don't use a credit card. Why owe interest on pizza you ate 2 weeks ago?

I see this more in my own generation/middle-class group, simply because those people are the ones who surround me. We have a desire to carry on the lives we had while we lived with our parents. We want the house, a nice TV, DVDs, toys etc...We convince ourselves that we need new clothes and a nice car in order to impress and succeed in our jobs. We rationalize (if I buy this treadmill, I will save money on gym membership!) and justify but, in the end, all we do is "owe."

I would never say I am blameless. I jumped on the housebuyin' bandwagon in '05 and am now down $50-70,000 in equity. I love food-I like to cook, buy quality ingredients and drink fine (ahem) beverages. I cave into my husband's and daughter's sad puppy eyes when they want plastic things. I use credit cards to get points and rewards (but I try to never carry a balance).

And then there are the wants-I want to travel the world . I want a bigger house. I want a nicer car. I want my daughter to go to the best schools. I want to go to the best schools.

We can't afford these things right now. So even if we could get credit, which seems doubtful right now, we wouldn't. But what we can do is cut back on our spending and bank the savings.

I think credit has and can be used wisely but I think it will be a long time before the nation has relearned how to use credit. But before we do so, we need to own up to what we owe and pay it off. And save. And then invest-in new technology, innovation, medicine and education.

In the meantime though, as individuals and as a nation I think striving for financial independence will be the most important thing we can do for ourselves, our kids and our country.

But then again, maybe I am just an 87-year old trapped in a 27-year old body. I swear I party! Occassionally! With 3-year olds....

Old fogey, signing off...