Fw: the conservative view

        Russell ought to be a teacher,   except he couldn't afford the cut in pay.

Probably couldn't stand to put up with the rebelious students either!!

 

----- Original Message -----

From: Russell Turner

To: Undisclosed-Recipient:;

Sent: Friday, December 07, 2018 7:13 PM

Subject: the conservative view

THE CONSERVATIVE VIEW

BY RUSSELL TURNER

MONEY, DEBT AND STUPIDITY

        I have heard it said that we humans never learn from history, it seems we are always destined to keep making the same mistakes over and over again. I have always been a devotee of history; I have found that every new generation is arrogant enough to believe that mistakes of the past would have never happened if they had been in charge. I am sure that the ones who made the past mistakes also had a similar belief. Recently I read an article where the creator of the most famous consumer 'credit score' in the United States announced a major overhaul in how it rates borrowers. Most people live and die by this 'FICO score'. A high FICO score means that it's easy to obtain loans at lower interest rates, whereas a low FICO score means that you have a history of not paying your debts thus making it difficult to obtain loans.

        There are tens of millions of Americans who either have no FICO score or they have BAD credit. With the new overhaul of credit, many of these people will be classified as an acceptable credit risk. This company is deliberately lowering its standards and pretending that people with a terrible credit history are actually credit worthy. Have we forgotten that roughly 10 years ago the whole world's economy was nearly collapsed by this same kind of idiotic behavior?

        During the housing boom in the early 2000s banks were doing EXACTLY the same thing-- deliberately lowering their lending standards and providing loans (WITH NO MONEY DOWN) to borrowers with bad credit. Even the federal government gave its seal of approval to this ridiculous policy. A housing bubble was created and, like all bubbles, it did pop. The result was housing prices tanked. Banks lost billions. The stock market plummeted. The economy went into a tailspin. It all started with a system that churned out far too much debt, far too easily, to borrowers who had no hope of paying it back.

        Spending money and incurring debt seems to be the norm in our culture, the US government is sitting on a record $21.7 trillion in debt. That's several trillion dollars more than the size of the entire US economy. Even state and local government are up to their eyeballs in debt and unfunded obligations. Each year it gets worse. The government's own projections show the debt only increasing-- they have no chance of paying it off. In America today the consumer is the major pillar of our economy, but there are some facts that we need to be aware of. Consumer debt is on pace to reach a record $4 trillion this year. Credit card debt is at an all-time high. Auto loans are at an all time high. Student debt is at an all time high. According to a recent study published by the Federal Reserve, 40% of adults don't have enough money to cover a $400 emergency expense. On top of that 21% of Americans have ZERO savings. Too much debt causes gigantic problems, but somehow people think that the solution is to incur more debt. Whether we want to admit it or not eventually the house of cards will collapse. Instead of trying to limit credit to people who have a poor history of paying their bills, we are encouraging poor financial practices. When crashes and bursting bubbles happen it affects all of us, even those of us who pay our bills. If we are to survive we need to change our attitudes on Money, Debt and Stupidity.