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America: The Land Where It Doesn’t Pay To Be Financially Responsible

19 September 2008 13 Comments

Today, I’m fed up. I’m fed up with our government and our fiscal policy. We now officially live in a country where it doesn’t pay to be personal and financially responsible. We have learned that it is acceptable to be completely irresponsible because our huge government will simply bail you out.

“Who cares how much it costs! Future generations will figure out how to pay for everything. I’m simply going to blame this on the other party and print more money to make this appear to be better all so that I will get elected this November.” — the typical American politician

The combination of verbal diarrhea coming from individuals like Nancy Pelosi and the actions of our government officials makes me want to vomit.

I hate to tell you this but perhaps we should trash all of the financially responsible ideas I have written about and we have discussed on this blog since we launched in April of this year. Perhaps, spending less than you earn and putting money away responsibly each month is not the right course of action. Perhaps, you should just invest your money in stuff by spending every dime you have and borrowing whatever money you need. Don’t worry if you might not be able to pay it off down the road. Why? Because we will continue to vote in elected officials who will tax the responsible to pay for the irresponsible.

Home Ownership

We can probably expect some sort of bailout for people who are having trouble paying their mortgage (somewhat likely under Mccain, highly likely under Obama). Let me ask you this: If you bailout my neighbor who never should have bought the house to begin with, what incentive do I have to continue being responsible and dutifully paying my mortgage each month? Why should I continue to be smart with my money while my neighbor buys two houses, a boat, three jetskiis and a new car? What a joke.

For all of you who blame our housing and financial crisis on “predatory” lending, here is what I have to say to you: Blaming the banks for lending you money is like blaming a crack dealer for your addiction to crack; blaming the government for not stopping the banks from lending you money is like blaming the police for not preventing the crack dealer from selling you crack. Again, personal responsibility is a thing of the past.

Entitlement

John F. Kennedy, a Democrat, once said, “Ask not what your country can do for you – Ask what you can do for your country.” Today, this theme is non-existant. We live in a nation where everyone feels they are entitled to more and they want the government to give it to them. If it means taking it from someone who earned it, so be it.

Why do we feel that it is acceptable to take more and more from the rich and give to those who haven’t earned it? Do you know that just about all rich people in America today are self-made? They didn’t inherit the money, they worked hard and earned it! Of course, those with money should perhaps shoulder more of the burden to fund our government; however, when funding a government to serve the people becomes more focused on wealth redistribution, this is when it becomes wrong.

I am truly demoralized with the political landscape and culture of our country. I begin to question why I work so hard for a future of financial freedom for myself and my family. I am not rich, and I don’t really care if I get rich, however, I do desire financial freedom and the ability to take care of my family, put my kids through college and have enough flexibility in my life to spend a great deal of time with them. I also desire to better our nation in many ways, especially fiscally, so that my future kids inherit a great country. I fear this will not be the case as we continue to push off our debts and responsibilities to future generations in the name of short-term stock prices and short-term economic growth. Are the jobs numbers six months ago more important than the fiscal health of America 50 years from now?

Thomas Jefferson once said: “Loading up the nation with debt and leaving it for the following generations to pay is morally irresponsible. Excessive debt is a means by which governments oppress the people and waste their substance. No nation has a right to contract debt for periods longer than the majority contracting it can expect to live.”

Amen to that.

Conclusion

To conclude, I must say that what’s done is done. AIG, Freddie, Fannie and others are bailed out by our government. There’s no going back. However, how do we move forward? The number one issue moving forward should be to prevent any single institution from getting too big to fail. In the future, the Wall St. banks should be left to die if their actions result in them going under. The executives, shareholders and employees will feel the pain. The tax payer should not. In the future, when an individual takes out a huge mortgage and can’t pay it, they should lose their home and the bank should lose their money. The tax payer shouldn’t lose anything. Here’s an idea: let’s get back to the idea that you should buy a home you can afford and not anything more. If you can’t afford a home, rent and save money.

Everyone wants to blame somebody. It’s the bank’s lending policies that caused this. No, it’s the short sellers. No, it’s the CEOs because they make too much money. Wait, I got it. It’s the Bush Administration. They screwed everything up. Or maybe it’s everybody’s fault? Maybe it’s our culture obsessed with debt and bigger houses. Maybe it’s our covetous attitude that says we deserve more even if we haven’t earned it.

Ok, I’m done. Not because I’ve run out of things to say, but because if I go any further, I might throw this computer monitor across the room. Enough has been said. Have a good weekend.

Fun Quotes

To provide you with a good laugh or cry this weekend, I wish to leave you with a few quotes from some extremely impressive Americans:

On Sarah Palin, Lindsay Lohan recently said “In the words of Pamela Anderson, ‘She can suck it.’” – Nice one Lindsay. If I ever run for office, remind me to look into Lindsay Lohan as my potential campaign manager.

On America and the National Anthem, Josh Howard was caught saying, “Start-Spangled Banner is going on right now, I don’t celebrate that [bleep] becase I’m black. God [bleep] national anthem.” The clip then ends with Howard or Howard’s buddy saying “Obama ’08”. I’m sure Obama is proud.

13 Comments »

  • Sean said:

    Great post, I definitely feel your pain. It’s a shame that people like us who actually put in the time and effort to become responsible about our finances end up having to pay the most for B.S. like this. Hopefully your frustration won’t prevent you from blogging though, it’d be a shame to lose your insight.

    Just out of curiosity, which candidate do you think is going to do a better job of straightening out this mess?

  • rebel said:

    Very well written. Personal responsibility is dead in America right now. Our government needs an overhaul. More people need to get upset.

  • Tom Lasley said:

    I’m 58 years old, and let me tell you something you young whipper-snapper:
    YOU’RE DEAD ON!!!
    It is encouraging to read your observations on this situation. Only a few of the CNBC talking heads have stated the “moral dlimma” in as clear terms as you have. I applaud the sarcasm in your commentary, and can only hope more will come to see the consequences of the current and ongoing financial environment. I do have one critical observation to make however. While I understand the metaphor of the crack buyer, the sale of crack is illegal. It is regulated, if you will. There are always those whose drive for personal gain will cause them to disregard the best interests of those with whom they tranact business. What I believe we are seeing has an interesting parallel to the “fall” of the Soviet Union. Natural consequences of the unwieldy economic system of over centralization, a burdensome bureaucracy, and the complete removal of incentive produced the fall of the wall. Now in America and the world, we may be witnessing the historical end of unbridled capitalism. This would be a good thing. When every business decision is driven soley by the instant gratification of bottom line profit, there is really little difference between a crack saleman and a mortgage broker, just a different product is involved. Regulation done well is a good a stabilizing influence on commerce. The insurance sector, the most heavily regulated sector in the financial markets, is doing quite well. Due to unfortunate human tendencies, transparency and review must be a part of the solution to the abuses of unregulated capitalism. A form of market socialism will undoubtably emerge, as is now being instituted, and I am sure there will be plenty of room and incentive for enterprise and profit. Maybe fewer CEO’s with 100+ m termination bonuses as they leave a bankrupt institution. Talk about no consequences!! Just some thoughts from a 3rd generation general contractor, employer, land developer, and entrepeneur.

  • Chris Ford said:

    Amen. I have been saying stuff like this for a while on my site. That JFK’s speech “ask not what your country can do for you but what you can do for you country” has become “ask not what you can do for your country but what your country can do for you”

    Things have gotten sick around here and they are not looking good.

  • Matt said:

    Brilliant.

  • Dmitri said:

    Bailing out homeowners was unthinkable until recently and yet it has now gained majority consent, at least among Democrats. Why this has happened, I believe, is because of our two-party system of government.

    Neither party is willing to risk losing votes to the other. They end up pandering to voter blocs, and rely on voter apathy and ignorance to gain support, i.e. a dumb electorate. Homeowners and minorities are their favorite voter blocs. As a result, we now have open borders and subsidized housing. Economics be damned; let’s pander to these groups!

    The only solution is, unfortunately, theoretical: implement a parliamentary system of government. Such a system has two advantages:

    1. There are multiple parties. If you like socialism, you can vote for the socialist party. If you like free enterprise, you will have a party to vote for. You won’t have to choose between two socialist parties (i.e. Republican and Democrat) that masquerade as pro-free enterprise.

    2. There are real debates inside the government. Each elected rep must stand up and defend his position against an opponent, who can follow up as often as desired. You don’t have politicians pontificating, as you do here, with no one ever challenging their arguments.

    Of course, this will never happen here. The elites won’t give up power and implement real change, not even term limits. The electorate is too dumb and conditioned to getting handouts, even though this is destroying the country.

    I expect things to get much worse here, worse than in Europe. Bush made America socialist; Obama will turn it into a Third World country.

  • Chris said:

    Dmitri-I disagree with “Bailing out homeowners was unthinkable until recently and yet it has now gained majority consent, at least among Democrats” John McCain said he wants to use $300 billion to allow homeowners to renegotiate principal on their mortgage. I wouldn’t blame that on the left.

    I do agree with you on the 2 party problem though

  • kevin duffey said:

    Chris, yes John Mccain brought that idea up in the last 2 debates. This is not a new idea however. Joe Biden mentioned the idea of renegotiating principles on mortgages up in the VP debate. Also, the idea has already been kicked around congress plenty. Mccain bringing it up just solidified that neither party has a clue.

  • Kevin Silva said:

    Why renegotiate principal? Extend the mortgage to 35, 45, 55 years, reducing the payments.

  • Mark Fox said:

    I found your site after finding myself in refinance hell, and I don’t qualify for any bailouts because I actually bought an affordable house and make payments as expected.

    Here’s another one for you, make sure you pay for extra uninsured/under-insured insurance on yourself, so when some no-job, no-house, no-insurance slams his truck into you, you’ll need it to payoff your health insurance company.

    I’m thinking about selling my house, leasing my cars, cancelling all my insurances and stocking up on gold bars in my basement safe and telling everyone I don’t own crap, please help. Hopefully, they don’t ask if I spent 9 years putting myself through college. I know that could really count against me.

    Thanks for the post dude!

  • Kevin said:

    Mark, thanks for the comments. Good luck to you and I hope to hear more from you and the progress you make.

    Take care