What

[Ken H.]

Did you know that the new (USA) 2010 Credit Card Accountability Responsibility and Disclosure Act specifically exempts so call ‘professional’ credit cards from the act’s newest consumer protection provisions? “Corporate” cards, small business cards, etc.

 

And more importantly, many of banks issuing cards are rushing out to ordinary consumers offers for free ‘upgrades’ to new “Professional” cards. Solictation mailings are up 250%. ("Look at MY new card - it's Professional Grade!") Which of course too will not be subject to the new rules.

 

As (always I guess) the same old rule applies – Caveat emptor.

 

SSDD

 

FUBAR

 

Sigh.

 

More here - Linky

[SeanC]

What's the fuss? Just pay the damn thing off, or at the very least, mail your frickin' payments on time. I don't have a lot of sympathy for people who carry revolving credit card debt and expect protection from exorbitant late fees.

[philbytx]

Greed never sleeps.................

[upflying]

The article sounds like a biased rant against the evil banks and financial institutions. MSNBC is not exactly known as a fair and balanced source.

Except for internet purchases, I'm a debit card user.

I with Sean, I never accrue interest fees/late charges on credit cards. I pay each billing in full. If I am charged interest from the point of sale, I cancel the card.

 

[philbytx]

+1

 

We only have one CC.

[EffBee]

What's the fuss? Just pay the damn thing off, or at the very least, mail your frickin' payments on time. I don't have a lot of sympathy for people who carry revolving credit card debt and expect protection from exorbitant late fees.

 

Ed Zachary.

 

Oooh, let me borrow money from you Mr. Bank, but please don't charge me for it, and be understanding when I can't pay it all back right away because you know I've got important expenses like music for my iPod and McDinners with the kids. And if you do charge me what you said you'd charge me before I spent your money, I'll cry to Mr. Government that I'm being picked on and he'll come and punish you and all I have to give him is my vote, which really isn't much given the value I place on integrity.

[ltljohn]

+1

 

We only have one CC.

+1

One card pay it off at the end of the month.

[Paul Mihalka]

Between Maria and I we use credit cards for everything they let us, like refrigerator or washer/dryer purchase. We pay off the balance in full every month. The cards we use pay US money. Every purchase we do pays us between 2% and 5%. We have not paid interest ever on a card, and don't have any card that has a yearly fee. The system is OK if you know how to use it.

[Francois_Dumas]

Usually not enough.......

[WURTY]

condoms

[philbytx]

Ah! And I am willing to bet they are THESE ?

[Redbrick]

The article sounds like a biased rant against the evil banks and financial institutions. MSNBC is not exactly known as a fair and balanced source.

Except for internet purchases, I'm a debit card user.

I with Sean, I never accrue interest fees/late charges on credit cards. I pay each billing in full. If I am charged interest from the point of sale, I cancel the card.

 

Use debit cards and pay off any credit card charges monthly....Never pay interest on credit cards....Personal mantra...

[Alan D]

condoms

Really old ones here. Do they go bad? Never mind, probably won't matter

[Hermes]

condoms

 

http://www.everything2.com/title/Sheep+gut+condoms

 

Wurty, isn't this counter intuitive and maybe redundant. Tell us how you feel about this (ab)-use.

 

jus sayin

[Kathy R]

What's the fuss? Just pay the damn thing off, or at the very least, mail your frickin' payments on time. I don't have a lot of sympathy for people who carry revolving credit card debt and expect protection from exorbitant late fees.

 

+1

 

In my wallet I always carry one of my new fangled retirement cards

Always meeting someone who says "What is your email address?" "What is your #?"

I HATE slowly reciting my email address - - pet peave #47

[philbytx]

pet peave #47

 

Wow! Thats a great email addy Kathy !

 

 

[Ken H.]

I don't have a lot of sympathy for people who carry revolving credit card debt and expect protection from exorbitant late fees.

What about the mother that the credit card is only way she has left to buy food for her kids this week? Do you have any sympathy for her? Or should her being financially raped by the credit card companies so they can post record profits and pay their CEOs millions just be normal and acceptable?

[SeanC]

I don't have a lot of sympathy for people who carry revolving credit card debt and expect protection from exorbitant late fees.

What about the mother that the credit card is only way she has left to buy food for her kids this week? Do you have any sympathy for her?

No. And why did this poor mother upgrade to a premium "corporate" card with the higher fees and penalties? Was she forced to do that?

 

Or should her being financially raped by the credit card companies so they can post record profits and pay their CEOs millions just be normal and acceptable?

If you can't pay it back, don't borrow it. If you borrow it, pay it back when you agreed to pay it back. What part of that is giving you difficulty, Ken?

[EffBee]

I don't have a lot of sympathy for people who carry revolving credit card debt and expect protection from exorbitant late fees.

What about the mother that the credit card is only way she has left to buy food for her kids this week? Do you have any sympathy for her? Or should her being financially raped by the credit card companies so they can post record profits and pay their CEOs millions just be normal and acceptable?

 

How did down-on-their-luck people deal with such difficulties before credit cards? They went to their neighbors. They went to their churches. They went to the shelters. They went to their fellow citizens. And now, they have food stamps.

 

Using credit cards in such a way is irresponsible. If you know you can't pay it back, it's stealing. And if you don't like the terms, don't get the cards.

 

See, it's simple. If you want to crush the life out of the capitalism and compensation inherent in the credit business, and hold the vendors in the kind of utter hatred you seem so willing to spew upon them, pay cash. It's easy. It's how daily American life worked for hundreds of years. Save. You don't need fast food 3 nights a week, or double espresso lattes, or 4 TV's and 3 DVD players in your home, or anything beyond basic transportation in your garage, or simple clothing on your back. But if you DO want those things, and you do not have the patience or self control to save for them, and you borrow money at agreed-upon terms in order to fund these acquisitions, then have the moral integrity to uphold your end of the deal, regardless of who is making what compensation on the other end. It's moral. It's right. It's legal. It's fair. It's there for both the taking, and the avoiding.

 

You choose. You live with it. It's called personal responsibility.

[Quinn]

And after the credit card companies make thier terms so easy to read and understand.

 

Also love the way rates can suddenly bloom to higher levels. Of course they notified you. It's somewhere in the little font section of your bill this month. Reminds me of Reader's Digest and other book of the month club schemes.

 

---

 

 

[Kathy R]

And after the credit card companies make thier terms so easy to read and understand.

 

Also love the way rates can suddenly bloom to higher levels. Of course they notified you. It's somewhere in the little font section of your bill this month. Reminds me of Reader's Digest and other book of the month club schemes.

 

---

 

 

None of that matters if you live within your means.

 

It bears repeating; Personal Responsibility.

 

 

 

 

[mbelectric]

How did down-on-their-luck people deal with such difficulties before credit cards? They went to their neighbors. They went to their churches. They went to the shelters. They went to their fellow citizens. And now, they have food stamps.

 

 

 

pay cash. It's easy. It's how daily American life worked for hundreds of years.

 

That was then, this is now. Seems easy enough, doesn't it?

 

Maybe for some, not so much.

 

MB>

[Nice n Easy Rider]

How did down-on-their-luck people deal with such difficulties before credit cards? They went to their neighbors. They went to their churches. They went to the shelters. They went to their fellow citizens. And now, they have food stamps.

 

 

 

pay cash. It's easy. It's how daily American life worked for hundreds of years.

 

That was then, this is now. Seems easy enough, doesn't it?

 

Maybe for some, not so much.

 

MB>

 

Things were a lot different back then. When I was 4 yr old I had a very bad infection of the kidneys that could've, should've killed me. But a new antibiotic (tetracycline) had just become available and the doctors used it and a low (virtually none) salt diet to save my life. But it was extremely expensive for both the drugs and the special foods i needed. My father, an auto mechanic, made a whole $100 per week. The bill at the pharmacy (back before there were pharmacy chains) had run up over $3000. The pharmacist told my father to pay what he could, when he could. Eventually the bill was paid in full.

 

How many Walgreens, Rite-Aids, or CVS pharmaciies do you think would do that today? How many grocery stores would extend credit to someone hit by a pile of unexpected medical bills?

 

What we've lost in America is a sense of community. We may have it on this Board, we may have it in our own local neighborhood, but we've lost it as a nation. I hope that somehow we'll figure out a way to find it again - not so much for us but for the generations behind us.

[taters]

no credit cards, i just can't be trusted..i have a black belt in spending....now i just have a debit card. i charge nothing and just pay as i go

[beemerman2k]

How did down-on-their-luck people deal with such difficulties before credit cards? They went to their neighbors. They went to their churches. They went to the shelters. They went to their fellow citizens. And now, they have food stamps.

 

Using credit cards in such a way is irresponsible. If you know you can't pay it back, it's stealing. And if you don't like the terms, don't get the cards.

 

 

I want to underscore EffBee's point here and I don't think many in this thread, let alone in this country, are really listening to what he is saying here. Here in America we are under the DELUSION that we need deserve a certain lifestyle simply because we're "special" -- whether we can afford it or not. The people getting credit cards are not doing so in order to make ends meet. The people getting credit cards are doing so in hopes of getting the material things they want NOW, rather than wait until they can afford them. Ours is a "buy now, pay later", "drive it home with no money down", "0 percent interest for the first 90 days", "hurry now for this limited time offer" society. We want to live the kind of lives that our favorite television stars live on the weekly drama shows we watch and worry about how to pay for it later.

 

 

See, it's simple. If you want to crush the life out of the capitalism and compensation inherent in the credit business, and hold the vendors in the kind of utter hatred you seem so willing to spew upon them, pay cash. It's easy. It's how daily American life worked for hundreds of years. Save.

 

It's really that simple, people. America need to WAKE UP to the distinctions between what we want versus what we can afford. Between what we need and what we want. Between living like responsible adults rather than spoiled children.

 

I have a cousin on Facebook. She is very poor. She lives in a very poor community in Buffalo, NY. She only has on again/off again jobs and she's a single mother. I just read a Facebook post of hers that she celebrated her son's 4 year birthday by buying him a pair of $150 Air Jordan type sneakers and a host of other material goods. WTF!!! :eek: And I guarantee you she did not pay cash!

 

This is an exact case in point of what EffBee is talking about. My grandmother is long gone, but I remember her well. She was an extremely frugal woman who did not have much to live on, yet managed to make ends meet and sent all three of her children (my mother being the youngest of that group) to college. She understood the meaning of "living within your means" and "living like a responsible adult rather than a spoild child". Her great grand-daughter, however, missed the boat on these values.

 

You don't need fast food 3 nights a week, or double espresso lattes, or 4 TV's and 3 DVD players in your home, or anything beyond basic transportation in your garage, or simple clothing on your back. But if you DO want those things, and you do not have the patience or self control to save for them, and you borrow money at agreed-upon terms in order to fund these acquisitions, then have the moral integrity to uphold your end of the deal, regardless of who is making what compensation on the other end. It's moral. It's right. It's legal. It's fair. It's there for both the taking, and the avoiding.

 

You choose. You live with it. It's called personal responsibility.

 

WE DON'T NEED THESE THINGS!!! Until we grow up enough to understand this clear and simple truth, we will always be financial slaves to the credit card industry. They lure us in with "buy now, pay later", "drive home today with no money down", "you get to have your toys and you don't have to worry about paying for it until some time in the future" ad campaigns.

 

They are capitalizing off of spoiled, American grownup children. Sorry to be so harsh, but that's the reality that I see everyday.

 

I GUARANTEE you there are countless families out there, most of them probably not from this country, who live without these frills, do not even own a television let alone pay for cable, study at night instead of playing with their toys, and are preparing for a prosperous future. GUARANTEED

[Ken H.]

No. And why did this poor mother upgrade to a premium "corporate" card with the higher fees and penalties? Was she forced to do that?

 

If you can't pay it back, don't borrow it. If you borrow it, pay it back when you agreed to pay it back. What part of that is giving you difficulty, Ken?

I’m not talking about the mother with a corporate credit card, I’m talking about the mother who, through no fault of her own, finds herself one of the 16.4% of US Americans who are un or under-employed, the USA’s U-6 number for August 2010, and a credit card is her method of last resort to obtain medicine for her sick 4 year old.

 

Meanwhile (fill in the name of a major bank here___________) posts record profits and pays their CEO (fill in a number with six zeros here $__________) on the backs of that $42 prescription she had no choice but put on her credit card, which will take her 12 years to pay back, even if she makes every single minimum payment on time.

 

THAT'S the part that gives me difficulty.

[Bob Palin]

I kind of agree about the personal responsibility aspect of using credit cards though I also think there should still be usuary laws covering the gouging. I would totally agree if we could get rid of advertising, the high minded personal responsibility types in this thread will undoubtedly just call its victims feeble, but advertising works and exerts enormous pressure on its targets, often through their children (hence $150 sneakers).

[beemerman2k]

Yes, but Killer, what can we do, shut down life? Humans will always create new ways to capitalize on the ignorance of others for their own gain. Humans have always done that, regardless of the nature of the socieity (capitalist, communist, tribal, etc) and humans always will. I don't believe we are creative enough to conjure up enough laws to create the perfect utopia that protects the ignorant from exploitation.

 

The answer, to me, is for the ignorant to get smart! Get wise! Grow up! Mature! Learn how to manage your money, your time, your labor! Adopt principles and values that hurt you now, but will pay you later. Do not "buy now, pay later", instead "save now, buy later"!

 

As EffBee pointed out, this is how life worked in America for hudreds of years.

 

The credit card industry is highly immoral, is anyone arguing that point? Remove them, and others, even illegal "credit offerings" will move in and take their place. Stupid buying practices and the lust for material goods when we cannot afford them are what ultimately fuel this industry. Nothing we can do about that. But if people adopt healthy spending practices and values, then none of those credit providers will have a foothold, will they? Then, due to intense competition for business, they will drop their interest rates, fees, and immoral practices just so they can compete and make some money.

 

They would have to have really good deals to win my grand mother's business.

[philbytx]

All well and good but..........consumer spending drives roughly 2/3rds of the economy!

Everyone "downstream" of the consumer is scared crapless should consumers "get religion" and spending drops. Because then they all suffer! Remember, reduced spending (and thusly income!) affects local businesses, local governments and "up".

Such a happening would mean less of EVERYTHING and/or higher taxes! Do you really think that 50+ years of inculcated Madison Avenue and government "bs" can be removed and replaced by commonsense and fiscal prudence in what, 5 years? Nah! YGBFKM

 

Not that I am against fiscal commonsense and prudence for I am a life long subscriber and adherent to those principals.

My grandparents and parents taught me well and I chose to remember and utilize those teachings . I really don't give a flyer actually.......stupid is as stupid does!

 

[Ken H.]

The answer, to me, is for the ignorant to get smart! Get wise! Grow up! Mature! Learn how to manage your money, your time, your labor! Adopt principles and values that hurt you now, but will pay you later. Do not "buy now, pay later", instead "save now, buy later"!

But again, I think you're dismissing out of hand 16% of the USA population that by-and-large have been thrust into a corner on no account of their own. Sure there are people that are living/buying beyond their needs irresponsibly. But I doubt many are in that 16%. I’m not talking about putting the big screen TV for the bedroom on Visa; I’m talking about predatory practices of banks on those using the Visa for groceries, medicine, rent, transportation, etc. when it’s their only choice left. Put yourself in the position of the parent with a crying baby at 2 AM and the next paycheck (if there even is one) is four days away and the only thing left in your wallet is a MasterCard. Make the card payment this month or take care of your child now? Which would you choose? They’re not “ignorant”, they’re desperate.

 

A recent study (just released last week actually) said 60% of Canadians are living paycheque to paycheque. And our economic numbers overall a much better than the USA’s.

 

To just say, ‘don’t spend – be responsible’ is IMO a gross oversimplification of the plight of many people today.

 

[Firefight911]

To just say, ‘don’t spend – be responsible’ is IMO a gross oversimplification of the plight of many people today.

 

OK, 'don't spend more than you bring in - be responsible'.

 

Better?

 

I don't think there is any oversimplification going on. It's the most basic math there is. I bring home X. My expenses are Y. X needs to be bigger than Y or else I need to make Y smaller. The extra component should just be Z, where Z is deducted from X before taking care of Y. In case of emergency, break Z.

 

The only hard part is that Z needs to last until the emergency subsides. I used to believe in the 3 months expenses rule. My neck surgery last year proved me wrong. I need to increase my Z to 6 months.

 

I think, as a whole, we make it more than it needs to be. The simpler the better. If you can't afford it, don't buy it.

[SeanC]

I’m not talking about the mother with a corporate credit card, I’m talking about the mother who, through no fault of her own, finds herself one of the 16.4% of US Americans who are un or under-employed, the USA’s U-6 number for August 2010, and a credit card is her method of last resort to obtain medicine for her sick 4 year old.

Ken, you started this very thread to rant about "professional grade" corporate credit cards that are exempt from the 2010 Credit Card Accountability Responsibility and Disclosure Act, to which we responded, so now you say you're not talking about those exempt cards, but all credit cards?

 

Okay, but here's the thing: the 2010 Credit Card Accountability Responsibility and Disclosure Act doesn't give consumers the right to not pay their debts. You still have to do that -- you are legally obligated to pay your debts -- regardless whether the card issuer is charging exorbitant late fees or not. You get that, right?

 

Meanwhile (fill in the name of a major bank here___________) posts record profits and pays their CEO (fill in a number with six zeros here $__________) on the backs of that $42 prescription she had no choice but put on her credit card, which will take her 12 years to pay back, even if she makes every single minimum payment on time.

 

THAT'S the part that gives me difficulty.

Man, you could feed the poor with all the red herrings you serve up! To wit, it doesn't matter how well off, comfortable or successful the lender is in relation to the borrower. That's a non-issue, completely irrelevant. E.g., if I'm flush with cash and you're very much in need of it, and you ask me for a loan, agreeing to pay it back in full with interest, it matters not one whit whether I go on to make even more cash through my business ventures while you find yourself in even deeper financial difficulty -- you still have to pay me back. I risked my money on your good faith (and legally binding) promise to pay me back.

 

And unless you're a close friend or family member, I'm going to do everything in my power to make sure you honor the agreement. It won't matter to me whether you spent the money on hookers and blow or medicine for your sick kid.

 

So here's a good guide in order of contingency (and descending order of happiness):

 

1) Don't borrow money you can't, or may not be able to pay back. If that doesn't work and there's a chance you won't be able to pay it back, you should probably...

2) Borrow it from a family member or close friend rather than a stranger or anonymous corporation. Why, you ask? Because family and friends are there to help; corporations exist to make a profit. Confuse the two at your own risk, or...

3) Seek protection under bankruptcy. This may help you escape your past mistakes, but if you are still unable to get your act together and move forward, your next option is to....

4) Become a ward of the state or charitable institution, be it temporarily or permanently. Acknowledge that you are incapable of taking care of yourself and your dependents.

 

I suppose you could add 5) Move to some socialist state where #4 and #2 (friends and family) are synonymous, where lending money is not only illegal, but unnecessary, but I'm not sure such a state exists.

[Ken H.]

All well and good but..........consumer spending drives roughly 2/3rds of the economy!

Phil makes a good point. An economic model that allows for obtain now - pay for later has been a fundamental building block of the rise of standards of living, and thus the economic growth that came with it, since at least the advent of the post WW2 housing and consumerism boom. The model has enabled some to become fabulously wealthy, a larger group to live rich, and many to live well. The creation and production of the things that were a part of, indeed the very definition of it; has been the core of our growth for a century.

 

It may be fine well and good to advocate going back to a save now - obtain later model, but we have to be quite consonant of the massive reduction in standard of living and economics that would go with it. From a lower standard of living and health of the majority middleclass, to the reduction in manufacturing and purchasing output, to the reduction in the profitability of the institutions (e.g. the banking system) that have both enable and profited from the current model, all the way to the top 1% that have benefited in wealth previously unimaginable.

 

I don’t know what the answer is, the model of the last 100 years is collapsing and millions of people at least figuratively, if not literally, are being left under a bridge. Mostly just because they believed in the lifestyle they were sold as being the best in the world. And now it’s no longer sustainable. The credit problem is just part of it. What I don’t think should happen though is that the top 1% be able to just waltz away saying, ‘Well thanks for the loot, now go suffer.’ But I don’t know how we equalize that either. We probably don’t. The society just collapses, millions suffer and die, and something new some day rises out of the ashes.

 

[Ken H.]

Ken, you started this very thread to rant about "professional grade" corporate credit cards that are exempt from the 2010 Credit Card Accountability Responsibility and Disclosure Act, to which we responded, so now you say you're not talking about those exempt cards, but all credit cards?

I did start the thread about so called professional cards, but it morphed into a conversation about the use of credit (cards) in general, and to that is what I was responding.

[EffBee]

All well and good but..........consumer spending drives roughly 2/3rds of the economy!

Phil makes a good point. An economic model that allows for obtain now - pay for later has been a fundamental building block of the rise of standards of living, and thus the economic growth that came with it, since at least the advent of the post WW2 housing and consumerism boom. The model has enabled some to become fabulously wealthy, a larger group to live rich, and many to live well. The creation and production of the things that were a part of, indeed the very definition of it; has been the core of our growth for a century.

 

It may be fine well and good to advocate going back to a save now - obtain later model, but we have to be quite consonant of the massive reduction in standard of living and economics that would go with it. From a lower standard of living and health of the majority middleclass, to the reduction in manufacturing and purchasing output, to the reduction in the profitability of the institutions (e.g. the banking system) that have both enable and profited from the current model, all the way to the top 1% that have benefited in wealth previously unimaginable.

 

I don’t know what the answer is, the model of the last 100 years is collapsing and millions of people at least figuratively, if not literally, are being left under a bridge. Mostly just because they believed in the lifestyle they were sold as being the best in the world. And now it’s no longer sustainable. The credit problem is just part of it. What I don’t think should happen though is that the top 1% be able to just waltz away saying, ‘Well thanks for the loot, now go suffer.’ But I don’t know how we equalize that either. We probably don’t. The society just collapses, millions suffer and die, and something new some day rises out of the ashes.

 

Ken, you seem to think in absolutes on this topic, as if it is inevitable that the economic system will collapse from credit abuse; that the public is unable to learn and alter its habits. And if they should, then the consumerism that has driven the economy will wither and it collapses from that end. There is a median available here. It involves consumer education, starting with an understanding of the individual's role in consumption and responsibility, taught as early as grade school and imbedded in our population by the time they graduate high school. This can also include an understanding of marketing and consumer motivation and manipulation, without demonizing it (which is the refuge of those who don't believe it can be understood and managed within our lives).

 

We are starting to see signs of retreat. Personal savings is up, but not enough. Discretionary spending is down, both because of restraint as well as a true 17% national unemployment rate). As these trends develop, it is important that our leadership encourage their continuance, in some moderation; that they encourage personal fiscal restraint to those things we need more than want. Wants are nice. An occasional want is a nice acquisition. But getting everything we want when we want it and worrying about whether we can pay for it or not, even in light of our implied agreement to do so when using credit, is destructive. And the bailouts that follow, instead of letting fail that which deserved to fail, are even more destructive.

 

[SeanC]

Ken, you started this very thread to rant about "professional grade" corporate credit cards that are exempt from the 2010 Credit Card Accountability Responsibility and Disclosure Act, to which we responded, so now you say you're not talking about those exempt cards, but all credit cards?

I did start the thread about so called professional cards, but it morphed into a conversation about the use of credit (cards) in general, and to that is what I was responding.

 

So what is it you're advocating, then? Credit cards with no limits that borrowers can pay back at their leisure, if at all, with no penalties or interest for late/missed payments? Who the hell would dare go into the lending business if that were the case?

[Kathy R]

I kind of agree about the personal responsibility aspect of using credit cards though I also think there should still be usuary laws covering the gouging. I would totally agree if we could get rid of advertising, the high minded personal responsibility types in this thread will undoubtedly just call its victims feeble, but advertising works and exerts enormous pressure on its targets, often through their children (hence $150 sneakers).

 

I agree, the usuary laws are a good thing.

 

I do not agree that we should get rid of advertising, or control it, in the way you advise.

 

I agree with the points Fernando made that we should instead educate our children.

 

My parents sent me out into the world well prepared. For folks who don't get that basic traning at home, perhaps we need to teach more of these basics in school. I never understood why they didn't teach people how to balance a check book in math class.

 

As for the folks who are unable to be responsible for themselves, I suggest they learn from their mistakes. I would never want to dumb down society for their benefit.

 

As for the folks who are destitute, through no fault of their own, there are many avenues open to them. We all support those avenues through tax dollars, donations and our volunteered time.

 

 

[Ken H.]

There is a median available here. It involves consumer education, starting with an understanding of the individual's role in consumption and responsibility, taught as early as grade school and imbedded in our population by the time they graduate high school. This can also include an understanding of marketing and consumer motivation and manipulation, without demonizing it (which is the refuge of those who don't believe it can be understood and managed within our lives).

 

We are starting to see signs of retreat. Personal savings is up, but not enough. Discretionary spending is down, both because of restraint as well as a true 17% national unemployment rate). As these trends develop, it is important that our leadership encourage their continuance, in some moderation; that they encourage personal fiscal restraint to those things we need more than want. Wants are nice. An occasional want is a nice acquisition. But getting everything we want when we want it and worrying about whether we can pay for it or not, even in light of our implied agreement to do so when using credit, is destructive. And the bailouts that follow, instead of letting fail that which deserved to fail, are even more destructive.

I agree with all of that. I just wonder if there is still time to, in many very real senses, start over? Think of how many generations it would take if we started with every single kindergartner tomorrow. And we’re not. The message is still the same old, ‘You too can have it all.’

 

My admitted very pessimistic view of the western model thinks no. At least not in the slowly fix/rebuild it sense. I think it will take a major game changing crash, basically a full blown collapse and start over for the mass populous to relearn. Then only because they will have no choice. And the casualties will be high. Yes there are some signs of positive trends, be it out of learning or necessity, but it’s mostly nibbling around the edges.

 

I think it’s going to take a full on admission that all these rescue efforts, stimulus’s, job creation programs, etc. that are going on now to try to roll the clock back to pre-2008 (heck pre-1970) are little more than a teaspoon to empty an ocean. But it (IMHO) will never happen because no politician, banker, CEO, etc. will ever go ‘there’ because they all know it would be personal suicide. And counter to their own personal interest of beating the system. Which is their only real goal.

 

In other words someone needs to step up to the podium and say, “Let the Pain Begin!”

 

Ain’t going to happen.

 

[EffBee]

There is a median available here. It involves consumer education, starting with an understanding of the individual's role in consumption and responsibility, taught as early as grade school and imbedded in our population by the time they graduate high school. This can also include an understanding of marketing and consumer motivation and manipulation, without demonizing it (which is the refuge of those who don't believe it can be understood and managed within our lives).

 

We are starting to see signs of retreat. Personal savings is up, but not enough. Discretionary spending is down, both because of restraint as well as a true 17% national unemployment rate). As these trends develop, it is important that our leadership encourage their continuance, in some moderation; that they encourage personal fiscal restraint to those things we need more than want. Wants are nice. An occasional want is a nice acquisition. But getting everything we want when we want it and worrying about whether we can pay for it or not, even in light of our implied agreement to do so when using credit, is destructive. And the bailouts that follow, instead of letting fail that which deserved to fail, are even more destructive.

I agree with all of that. I just wonder if there is still time to, in many very real senses, start over? Think of how many generations it would take if we started with every single kindergartner tomorrow. And we’re not. The message is still the same old, ‘You too can have it all.’

It needn't be a kindergarten up effort. All children currently in school could be intercepted at their grade levels, and re-education as to the realities of fiscal responsibility (both personal and governmental) as well as personal accountability could begin with the next semester. If a bit rushed at first, it could be refined on the fly.

 

The children are not the problem, though. It is the outlook of educators who are so incredibly hellbent on not doing anything that might upset the little tykes, or "damage their psyches or self esteem."

 

Presidential or congressional mandate could have some effect. But these are people who consider themselves the intellectual elites of the country, and their compliance is not obtained easily lest there be something in it for them (easier work, more union power, etc).

 

I suggest performance-based compensation or, failing that, severance.

[Ken H.]

It needn't be a kindergarten up effort. All children currently in school could be intercepted at their grade levels, and re-education as to the realities of fiscal responsibility (both personal and governmental) as well as personal accountability could begin with the next semester. If a bit rushed at first, it could be refined on the fly.

Again, agreed that it could be done, but will it be done? Colour me skeptical, at best.

 

A large part of the initiatives to recover the economy to-date have revolved around loosing credit and encouraging excess buying, not tightening it and discouraging overconsumption. Get the economy moving again by getting people/companies spending again has been the mantra. Totally ignoring the fact that they have no more real money in hand to spend this month than they had last month.

 

Presidential or congressional mandate could have some effect. But these are people who consider themselves the intellectual elites of the country, and their compliance is not obtained easily lest there be something in it for them (easier work, more union power, etc).

But when has any politician (of any political persuasion) given, in the last 100 years anyway, the “Don’t go buy a new car this year [because you can’t afford it]” speech? Any current one that did would be out by Tuesday, any prospective one wouldn’t have the proverbial snowball’s chance. “Personal Fiscal Responsibility” has joined the ‘seven words you can’t say on TV’ list.

 

 

To me what it comes down to is short-term vs. long-term thinking. Short-term – yes lower interest rates, easer credit, incentives, spending programs, will push back the reaper. A little. For awhile. But a long-term fix is going to require a very major, very painful reset to come out better on the far end. We can’t (IMHO) slowly creep back to where we were. I’m talking about a reset in the order of a 60% reduction/crash in GDP kind of reset.

 

In the meantime we’ve got credit card companies with floors full of marketing experts and lawyers scheming ways to get around pro-consumer regulations (what started this thread) before the ink is even dry on them. It took Visa less than a month to figure out a way around the new 2010 Credit Card Accountability Responsibility and Disclosure Act.

 

Sigh. FUBAR. Be scared, be very-very scared.

[Ken H.]

So what is it you're advocating, then? Credit cards with no limits that borrowers can pay back at their leisure, if at all, with no penalties or interest for late/missed payments? Who the hell would dare go into the lending business if that were the case?

I don’t have the magical answer. If I did would I be sitting in a cubical in some software development company in Edmonton Canada for god’s sake?

 

The problem is bigger than just the specifics of credit rules and responsibility. It’s at a societal level. I think there are certain aspects of the social/economic model that are fundamentally flawed and if were (but won’t be) corrected would be steps in the right direction. Including (IMHO):

 

True universal health care. 60% of all bankruptcies in the USA are still caused by unexpected medical expenses, not credit abuse or unemployment.

 

Debt forgiveness, or at least debit deferral w/o interest or penalty in proven hardship situations. Sure I still owe you the money, but you making a profit off of my unavoidable hardship is socially immoral. And contributes to the overall downward spiral of both me and you in the long-term bigger picture.

 

A de-emphasis that the path to happiness is through the possession of things.

 

An abandonment of the concepts of globalization and imperialism. Both primarily driven by the pursuit of things. A return to communalism and localism.

 

A redirection of the education system from the overall goal of learning financial wealth skills to learning life fulfillment skills. E.g. relationship building, value of nature and harmony, inner-satisfaction and self actualization.

 

In short if we re-define what our successful lives are, the credit abuse problem will solve itself.

 

 

[SeanC]

 

So what is it you're advocating, then? Credit cards with no limits that borrowers can pay back at their leisure, if at all, with no penalties or interest for late/missed payments? Who the hell would dare go into the lending business if that were the case?

I don't have the magical answer. If I did would I be sitting in a cubicle in some software development company in Edmonton Canada for god's sake?

 

The problem is bigger than just the specifics of credit rules and responsibility. It's at a societal level. I think there are certain aspects of the social/economic model that are fundamentally flawed and if were (but won't be) corrected would be steps in the right direction. Including (IMHO):

 

True universal health care. 60% of all bankruptcies in the USA are still caused by unexpected medical expenses, not credit abuse or unemployment.

 

Debt forgiveness, or at least debt deferral w/o interest or penalty in proven hardship situations. Sure I still owe you the money, but you making a profit off of my unavoidable hardship is socially immoral. And contributes to the overall downward spiral of both me and you in the long-term bigger picture.

 

A de-emphasis that the path to happiness is through the possession of things.

 

An abandonment of the concepts of globalization and imperialism. Both primarily driven by the pursuit of things. A return to communalism and localism.

 

A redirection of the education system from the overall goal of learning financial wealth skills to learning life fulfillment skills. E.g. relationship building, value of nature and harmony, inner-satisfaction and self actualization.

 

In short if we re-define what our successful lives are, the credit abuse problem will solve itself.

Please excuse this obiter dictum, but I feel compelled to mention it: I ask you what kind of solution you'd propose to the credit card problem, you tell me you don't really have an answer, then proceed to posit a list of five points along with a summary of how you think they'd solve the problem. That's chuckle-worthy, Ken (not your solutions, per se, but your method). [/aside]

 

Item 1: Universal health care will still rack up incredible amounts of debt; it will just consolidate it and push it off on future generations. Sure, coverage will widen, but quality will decline, as will innovation, research and technology. Take away incentives to produce great stuff, and you can say goodbye to great stuff. On the other hand, maybe Canadian-style mediocrity is all we really need....

 

Item 2: We already have mechanisms in place for debt forgiveness in situations of proven hardship. As for deferral w/o interest or penalty, that depends entirely on the lender. If it was mandatory, lenders would simply refrain from lending or offering credit to all but the most credit-worthy among us. I suppose that would solve the problem, but not in a way I think you'd want.

 

Item 3: This is a matter for churches, families, etc. to discuss and promote.

 

Item 4: This won't happen any time soon. And when it does, it will be the result of some sort of world-wide catastrophic event or chain of events, at which point survivors won't have much of a choice other than communalism and localism. That said, people can and do choose to live communally and locally in an otherwise global economy. The option is always there.

 

Item 5: Our education system very pointedly does NOT teach very good financial wealth skills. If it did, we wouldn't have many of the problems we're facing now. In fact, I would say the system spends way too much time on soft and fuzzy topics like "life fulfillment," "inner satisfaction" (aka self-esteem building), etc. You and I both know that we learn from both success and failure. Success is rewarded (pleasure); failure is punished (pain). Both are necessary and valuable to learn anything of importance. Living beyond one's means, for instance, is never going to be a good idea. It eventually leads to pain. I was taught not to do this, that it's better to be the ant than the grasshopper. For those that weren't taught this, or were taught it but chose to ignore it, well, they're learning now from their mistakes, right? Failure hurts. It's supposed to. So I would say teach MORE skill and teach less fluff. You want more harmony and inner-satisfaction? Learn what interest amortization really means. Practice and perfect your numeracy skills. Learn how to save and spend conservatively while you develop proficiency in investing for your future, both short, medium and long-term.

 

If they're teaching this now, Ken, I'd have to say that students are skipping class building relationships and actualizing with their friends.

[beemerman2k]

Success is rewarded (pleasure); failure is punished (pain). Both are necessary and valuable to learn anything of importance.

 

This is among the reasons the concept of "freedom" is so critical. Take away my freedom to take chances, and suffer the consequences or reap the rewards, in the name of "protecting me from myself", and you end up with an ultra-soft, ultra-immature society that cannot handle the smallest crisis without deferring to some authoritarian body.

 

I believe adults are called to be adults! Therefore, the freedom to live your life and take your chances is the most important ingredient to our maturation process there is. I believe both individuals and societies need to have the freedom to make mistakes, suffer for them, correct them, and grow up. And personally, I see our own American history through this very lens -- especially in terms of race relations. Nothing personal, we just had to make mistakes, assess our collective actions, make some adjustments, and move on. That's how you grow up, which is exactly what we've done as a nation. But if we ever were to throw out the baby of "the freedom to live and make mistakes" with the bath water of those mistakes, we will condemn ourselves into a perpetual state of childhood desparately clinging to the myth that "life is supposed to be fair", and then angry when we are reminded that it is anything but fair.

[Ken H.]

Please excuse this obiter dictum, but I feel compelled to mention it: I ask you what kind of solution you'd propose to the credit card problem, you tell me you don't really have an answer, then proceed to posit a list of five points along with a summary of how you think they'd solve the problem.

You misconstrue what I said. I said I didn’t have any solution to credit cards, that the problem is societal. Credit abuse is merely the symptom, not the problem.

 

Item 1: On the other hand, maybe Canadian-style mediocrity is all we really need....

Canadians are healthier than US Americans by every measure. And for less cost. But then we’ve been over that ground before.

 

Item 5: Our education system very pointedly does NOT teach very good financial wealth skills.

My point is not that we are not teaching fiscal responsibility (although I agree we are not, as I said in agreement with Fernando in the other thread). My point is that the overarching goal of the education system, in particular the higher-education system, is to teach people skills to use to make more money than they could without those skills. And I think that’s ultimately an empty and rather shallow lifeline goal/prospect. We should be teaching people more on how to live life well and less of just how to make money.

 

In fact, I would say the system spends way too much time on soft and fuzzy topics like "life fulfillment," "inner satisfaction" (aka self-esteem building), etc.

But you see, those “fuzzy” (to use your term) things are where the very joy of living itself resides.

 

We’ve been taught that our happiness or sense of fulfillment and accomplishment is a result of the things/dollars we accumulate. But yet there’s that nagging sense of disappointment/disillusionment/disinterest in the ‘things’ that always sets in. So we go try and get more things to fill the void not quite filled by the other things, and that doesn’t fully work, so it’s off to get some more things, and so the vicious cycle goes. Now more than ever as the always fragile anyway façade of our possession happiness crumbles. (I’m thinking in particular houses.)

 

When are we ever going to learn that those things, at best, are a temporary proxy for a true sense of fulfillment and satisfaction with and within our lives? THOSE are the skills, at some of the skills, we should be teaching in schools. Not just, ‘which profession interest me in making the most money?’

 

[Joe Frickin' Friday]

My point is that the overarching goal of the education system, in particular the higher-education system, is to teach people skills to use to make more money than they could without those skills. And I think that's ultimately an empty and rather shallow lifeline goal/prospect. We should be teaching people more on how to live life well and less of just how to make money.

 

I'm imagining this classroom exchange:

"What is best in life?"

"To crush your enemies; see them driven before you; and to hear the lamentation of their women!"

 

You're proposing to have the schools teach kids what's important, i.e. values. That's been widely recognized for a long time as the domain of parents/family, and parents rightly get irritated when they think that schools are trying to instill particular values that may or may not be in sync with what they (the parents) are trying to teach their kids.

 

When are we ever going to learn that those things, at best, are a temporary proxy for a true sense of fulfillment and satisfaction with and within our lives? THOSE are the skills, at some of the skills, we should be teaching in schools. Not just, which profession interest me in making the most money?

 

I don't know what schools you went to, but mine weren't in the habit of teaching me which profession made the most money. Indeed, the schools I went to didn't even ask me what profession interested me. In high school they offered a range of courses (in college, a structured list of courses in pursuit of a particular major), and I picked what suited me. End of story. Do other schools handle things differently?

 

 

[SeanC]

My point is that the overarching goal of the education system, in particular the higher-education system, is to teach people skills to use to make more money than they could without those skills.

In my experience, the higher education system wasn't concerned at all about whether I learned anything that would lead to me making more money after graduation. It wasn't even particularly concerned with "real world" skills at all. It's run by a privileged class of tenured professors, most of whom held the real world in disdain. For-profit institutions (e.g., University of Phoenix, Coleman College, ITT Tech, et al.) are probably different in that regard, but I believe the bulk of higher education in this country is handled by public and private universities and colleges.

 

We should be teaching people more on how to live life well and less of just how to make money.

Isn't that what the "Self Improvement" section at Barnes & Noble is for?

 

We’ve been taught that our happiness or sense of fulfillment and accomplishment is a result of the things/dollars we accumulate.

Who taught you this, Ken? I honestly don't recall a single teacher, coach, parent, family member, pastor or professor ever telling me that my happiness is a function of the possessions I accumulate. Ever. In fact, I was taught the opposite, that I should follow my bliss and that doors would open if I did. And my experience leads me to believe they were largely correct about that. Do what makes you happy, follow your interests and passions, etc. were repeated almost to the point of incantation.

 

When are we ever going to learn that those things, at best, are a temporary proxy for a true sense of fulfillment and satisfaction with and within our lives? THOSE are the skills, or some of the skills, we should be teaching in schools.

What's the skill? You stated it with an all-caps "THOSE," so I assume you have something specific in mind.... I mean, believing a true sense of fulfillment awaits you is not a skill; it's a belief, a matter of faith. Just as "follow your bliss" is not a skill but a mantra. But you said skill, so I'm interested to know what skill does one learn and practice to achieve a true sense of fulfillment? Prayer? That ain't gonna happen in school. Meditation? Yoga? Deep breathing exercises? I learned these in P.E. class, from my wrestling coaches, etc.

[Ken H.]

We should be teaching people more on how to live life well and less of just how to make money.

Isn't that what the "Self Improvement" section at Barnes & Noble is for?

But that’s my point exactly - The “Self Improvement” section shouldn’t be (just) at Barnes & Noble. It should be just as significant part of our education as macro-economics or Physics 101 is.

 

We’ve been taught that our happiness or sense of fulfillment and accomplishment is a result of the things/dollars we accumulate.

Who taught you this, Ken? I honestly don't recall a single teacher, coach, parent, family member, pastor or professor ever telling me that my happiness is a function of the possessions I accumulate.

I mean “taught” in the sense of ingrained into our mindset that a constant quest for more wealth and things is the appropriate, most fulfilling, most successful way to live. Taught to us by the environment (in the sense of human influence) around us. The messages our parents give us from when we where 4, schools, the definition of “the American Dream”, advertizing, etc. Grow up, go to college, get a good job, buy a house, drive a nice car, and on and on is the message of what the road to happiness and being successful is.

 

It’s the social/economic model that tells us over and over again that consumption, the possession of things is what makes, how a entire country even, is measured, judged as successful or not. “Money makes the world go round, the world go round, the world go round…” Why is GDP only defined in dollars?

 

We think we haven’t been ‘taught’ those things by teachers, coaches, parents, whomever, but yet when someone says something disparaging against them, e.g. “Buying a house is the stupidest thing you could do,” “That’s the ugliest car I’ve ever seen” we quickly jump on the soapbox to defend it. An aspect what we believe, of who we are, has been challenged and needs to be defended.

 

We’ve actually been taught the lesson of the importance of consumption and possession of things quite well.

 

But we have all this ‘things’ and yet we (as a whole) are more unhappy, feeling less fulfilled than we’ve ever been. Something is wrong with where we are seeking happiness and fulfillment. It decidedly is not in the Visa card in our wallet.

 

When are we ever going to learn that those things, at best, are a temporary proxy for a true sense of fulfillment and satisfaction with and within our lives? THOSE are the skills, or some of the skills, we should be teaching in schools.

What's the skill? You stated it with an all-caps "THOSE," so I assume you have something specific in mind.... I mean, believing a true sense of fulfillment awaits you is not a skill; it's a belief, a matter of faith. Just as "follow your bliss" is not a skill but a mantra. But you said skill, so I'm interested to know what skill does one learn and practice to achieve a true sense of fulfillment?

I never said it “awaits you” in a passive sense. I’m saying how we obtain a true sense of fulfillment is misguided in our current social/economic model.

 

Skills/lessons? Things like –

 

How you treat others is important and ultimately will reward or doom you. So learn how to treat others wisely with knowledge and forethought of the likely outcome of your actions toward them.

 

A $100,000 car won’t make you happy if 10 years from now you feel guilty because you had to miss your child’s recitals to work late to pay for it, your dedication to you career. So learn the skills to weigh and understand the cause/effect of your purchase, career decisions.

 

Stopping to smell the roses (both figuratively and literally) not only is important, it’s a requirement. So learn how to better life-balance your life because your heath quite literally depends on it.

 

All the religion in the world is useless if you don’t have any faith. So study all you can about what you believe and learn how to be self critical of, self aware, about whether or not you are living up to your beliefs.

 

“I love you” are the three most important words in the world. “I hate you” are too. So learn when and when not to say either.

 

Learn that the concept of “pay forward” is the best investment you can make. Of any type. In anything.

 

You can have everything, but if you don’t know what you truly want you have nothing. So learn the skills to weigh what you truly want and more importantly – how to attain it.

 

And many more.

 

 

Call those things fuzzy if you want, but I think if we’d learn a few more of those kinds of skills and a few less of (e.g.) stock portfolio management, we’d all be a lot better off.