LC’s Commentary

Listen To The Voice of Reason

Going down with the ship

Are you one of the unlucky ones

 

The mortgage crisis continues to deepen. It ensnares more people on a daily basis.  Talking heads are busy trying to place the blame on several factors. Some see borrowers as the prime reason we are in this mess.  Others see lenders, speculators and others trying to make a quick buck as the prime perpetrators.  Borrowers certainly share some of the blame by borrowing beyond their capacity to pay. Lenders are to blame for letting people have loans who were not financially able to repay.  Mortgage companies and others that underwrite loans are to blame for the constant barrage of literature and media blitz promoting the availability of easy credit and creative ways of qualifying for a loan.  

Now that we are in this mess, people of all walks of life need to step back and assess the way they are spending their money. People need to understand that things will not get better for a very long time. How long is anyone’s guess. Do not believe for one minute that talking heads on television and radio have a clue when things will get better. These folks make a good living making predictions and are usually optimistic about the future of our economy. Less than six months ago some were bragging about how great the economy was and the number of new jobs being created.  The head of the Federal Reserve was before a senate hearing last week and he did not have a clue of when this thing would right itself. If he, the head of the Federal Reserve, with a staff of seasoned financial thinkers do not have a clue when things will get better, why think for one minute that Limbaugh and Hannity know what they are talking about.

What can individuals do to soften the blow of the downturn in our economy and the impact of the housing market meltdown? For starters, people can rethink what they have to have. They need to assess how much nice to have, but unnecessary things cost. For instance-how much does a cell phone cost? How much does a wide screen LCD television cost? How much does a cable and satellite television subscription cost?  How much do 22 inch tires and rims add to the cost of an Escalade? How much does a trip to the casino cost?

Once these costs are verified, one needs to decide which ones are not essential and do away with them.

One must also pay attention to how much the cost of essential (must have commodities) are increasing. The huge increase in the cost of petroleum products is having a huge negative impact on many families. Most of us have to have them to get to work, cook our food and warm and cool our homes. Do not forget the impact it is having on airline, bus and train travel. Public Works and Public Safety infrastructures have seen large increases in their fuel bills. School systems have not been exempt from large increases in their fuel bills. Who will pay for these increases? Local tax payers will pay for them. Many feel they are already overtaxed and are reluctant to accept tax increases for any purpose.   

Folks, I am telling you, you had better reprioritize your spending. Stay away from the casinos. Stop playing so many Scratch Offs and daily and weekly lotteries. Drive your car a few years longer. Do what ever you can to keep more of your hard earned money. Go back to your roots and plant a small vegetables patch if you have the space. The price of food has gone through the roof and will only go higher. While you are at it, impress on our children the need to moderate their demand on you for unnecessary electronic toys and expensive clothing. Although the economic storm is raging, we have no choice but to ride it out.

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April 16, 2008 - Posted by | borrowing money, Failed economic poicy, wealth redistribution

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