Bold Colors Blog

Stickin’ it to the libs, one day at a time

Hard times in 2008–or, the consequences of living on credit

Posted by Liberty on November 18, 2008

If you read or watch any MSM sources, you get slammed on a daily basis with stories about how the poor economy is affecting people.  The more of these stories I read, the more trouble I have taking this “crisis” seriously.  How bad would the economy be if the MSM hadn’t been cheerleading this economic crisis with the hope of getting “change” in the form of Obama?  I feel there’s a strange dichotomy at work here: the real circumstances and what is being reported. 

From MSNBC this morning: 

 [please note, I don’t really consider MSNBC to be a serious new source but I looked on their website this morning, knowing I’d find exactly this kind of sob story.]

Mortgaging the future in desperate times 

“Despite big penalties, many are cashing in or borrowing against retirement”

This story profiles a three different people as they explain why they have liquidated their retirement accounts to pay for living expenses.  It also cites a survey that found that:

“6.2 percent of retirement account participants at large corporations had taken an early withdrawal as of Sept. 30, compared with 5.1 percent who reported taking early withdrawals in 2006.”

My theory is that the people profiled in this article could have been part of that approximately 5.1 percent who would have raided the retirement nest egg, regardless of the economy.  Here is what qualifies as “hard times” in 2008:

“As they work to get their finances back on track, the family has had to cut back on little luxuries like dinners out, trips to the movies and  buying new clothes.

One of the hardest decisions was to tell her granddaughter that she could no longer take horseback riding lessons because they couldn’t afford it.”

No more horseback riding lessons–isn’t there money for that in the federal bailout?  Maybe there should be!

“Cundiff, 53, used the retirement funds to pay off credit card debts and a car loan, bought himself a new bicycle to commute with and helped out with his daughter’s wedding.”

Oh, and he bought a bag of dried beans, some rice and three cans of tuna.  He’s been living in a cardboard box outside of Walmart.  [Ok, I added that part.  His story just wasn’t that pitiful.]

“Cheryl Ambruse knows she has made some financial mistakes. There was the decision to buy a nicer car, even though it meant taking on a much higher car payment. Then there was the decision to take out a second mortgage with a drastically higher interest rate, which would take years to refinance. And there were those many, many daily decisions just to put a purchase at Home Depot or another store on one of her credit cards, all of which gradually accumulated into thousands of dollars in debt.

The mounting financial woes had been eating at Ambruse for a couple of years. But this summer, as gas and grocery prices soared and she continued to deal with a drop in her overtime and bonus pay, things came to a head.”

The paragraph heading above that quote is “Almost a nervous breakdown.”  I’m going to translate:  “The consequences of spending more money than you have.”  The article goes on to say that this isn’t even the first time that Cheryl Ambruse has borrowed against her 401k.  This is not an economy problem–it is a personal responsibility problem.  How many people are going to take this MSNBC story at face value, though?

As if that article weren’t enough, here’s another from the Seattle P-I from November 9, 2008.

The Money Squeeze: Economic crisis devastating for family with autistic son

The story details how the slowing housing market have affected a real estate broker and his family, especially his autistic son.  They can no longer afford his autism therapy, and believe me, I’m sympathetic to the fact that the therapy is a huge expense, one that would be tough for most families to bear.  But if you read deeper into the article, you find that their financial lifeline was a $210,000 line of credit. 

“Their Ford F-250 truck, Renton home, even Ott’s rare coin collection — one of the few things he inherited from his father — are up for sale, or could be.”

“In the backyard, there are still trappings of a flusher life: a Striper fishing boat, a spare truck, a Lexus sedan.”

When I read this story a couple of weeks ago, it was a reminder to me how important it is to live within your means.  No matter how much you’re making, put as much as you can afford into savings and do your best to leave it there.  When I go out in public these days and see how materially blessed we are as a society, I have to wonder how much of these fancy trappings are actually paid for. 

I just finished an autobiography written by a woman who was born on a farm in Nebraska in 1914.  She wrote of the truly desperate times that rural people faced in those days–droughts, having crops destroyed by grasshoppers, moving from place to place in search of better land, work and food.  She described surviving the Great Depression and the stark poverty of those times gave me some much needed perspective.  Not many of us can relate to having only one or two changes of clothes or having to pack the bare essentials onto the back of a truck so you can leave your home in search of a job. 

America has seen genuinely hard times and survived.  We will weather this financial crisis and hopefully come out better for it.  In the mean time, take the MSM with a grain of salt.

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One Response to “Hard times in 2008–or, the consequences of living on credit”

  1. […] Here is the original: Hard times in 2008-or, the consequences of living on credit […]

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