Thursday, October 16, 2008

Credit Crunch?

So am I a lone island all to myself or something? I know politically the answer is probably a resounding yes. But I pose this question regarding credit. All I hear in the MSM, and unfortunately from my new BFF, John McCain, is credit crunch this, credit crunch that. As someone who doesn't use any credit, I don't really care that much. I have no debt, I want no debt. Debt is slavery after all.

However the banks I deal with, and some I don't deal with haven't clued in no my no debt lifestyle. Between the mrs. and myself we'd get on average 10 credit card offers a week. These days that number has doubled, maybe even more than doubled. It has gotten to the point where almost all of our mail is some credit card offer. Either a new card or an existing card sending us "convenience check" offers. The temptation to take up all these offers, max them all out, move to Mexico, become Juan Jesus Hernandez and never look back is so tempting.

I also once upon a time made the mistake of talking to a mortgage broker and giving him my email address. I get weekly emails from him telling me how wonderfully low the rates are and how I could easily qualify for all the money in the world.

So I ask where is this credit crunch I keep hearing so much about? Wait I know, I can answer my own question. The credit crunch is out there for the 520 FICO deadbeats who can no longer score $500K mortgages or $50K car loans on a $35K salary. Someone like me with excellent credit and high income can still get all the debt I want. But that is the way it should be. This is the natural state of things. Yet for some reason the government wants to bring us back to the un-natural state where anyone with a pulse is able to get credit.

I want the credit crunch to continue. I want it to be made permanent. Debt should only be issued to those that can pay it back. Why in the world is this so hard to understand?


bonnie said...

You must have used credit at some point or you wouldn't have excellent credit as you state you do. You must have used it wisely like many other Americans, including myself.
The credit crunch only becomes a problem when small businesses need it to do payroll while they are waiting for their invoices to be paid. They use credit to float money during the interim.
I agree with you that consumer debt is out of control and we need to become savers.

Ed said...

Yes I did use it, sparingly at some point.

I disagree with this notion of businesses needing credit to meet payroll. If a company is in that dire straits, as to need debt to meet payroll, well then that company should probably not exist.

I don't distinguish between personal, business or govt debt. It is the same thing. I see it as a parent/child relatioship. The govt spends 110% of what it takes in, that's mom and dad. Consumers and businesses are the kids who think hey mom and dad are living way beyond their means, guess it's OK. I will too.

At the end of the day it all gets paid by us. Government doesn't make money, it takes money from citizens. Government doesn't pay interest on loans, tax paying citizens pay interest on loans. Businesses don't pay taxes, their customers pay taxes. Businesses don't pay interest on loans, their customers pay interest on loans.

Debt is slavery whether it is debt on a Visa card, debt in the form of a Treasury Bill or debt in the form of a small business loan.