July 15, 2008
I am not an economist. I am not a capital-E Economist, nor do I want to be, because economics is just one of those sciences where you can say one thing and the listener can hear the complete opposite. Oh, wait. That happens in every science.
So here’s the thing. I’ve got a little over four grand in credit card debt, not counting my car loan. I have a job that pays all my bills and then someâ€”I overpay my credit card bills of courseâ€”and leaves me enough money to afford to go to work, buy groceries every week so I can avoid paying a place to eat (read my lips: two hundred percent markup), and I can still buy me a few permanents (clothes, clearance skate shoes at thirty bucks a pop, books) with the cash money I got left. I am clawing my way out of debt and I am having the time of my life doing so.
On the larger scale of things there’s quite a few things going on in the larger world as depicted by the Nightly News. Financial markets are crashing, there is a recession, apparently, and people, oh the people are suffering. The sky is falling, right? The funny thing is, it should have fallen a while ago.
The USA is a consumer society. I won’t argue the pros and cons of that. The problem with having a consumer society based on credit is that the more you borrow, the more you put off paying back the Piper and in this case, dear friends, that burden just keeps on growing, and growing until it breaks everyone’s backs. A consumer society based on real assets, on cash, would have taken a while to take off but it would have remained solvent. But people have gotten greedy. They want it all, now. Except, they seriously can’t.
A swift and brutal market correction of the subprime mortgage issue early on would have signalled lenders and developers to slow the hell down. Instead, there was a large round robin financial square dance passing things around and hiding the problem prolonged it and enlarged the area of sky that was actually falling. And we now have what is today. Five hundred thousand foreclosures occuring in an overnight period in the financial time scale would have probably prevented the two and a half million projected this year. Things would have played out differently. Or not. I am not an economist, anyway.