Of subprime loans and debt

The business pages of the papers and the crawlers on the screens of 24 hour cable news networks are screaming the news this week that the sky is falling.  If not the sky—the roof is certainly caving in.  For several years, the developed world, and Americans in particular, have enjoyed easy credit through low interest rates.  And who was complaining?  We were able to purchase the home we are in because of low rates.  Many others have had the same experience.  And we’ve all ‘saved’ lots and lots of money.  But ironically, we are worse off now than we were before.

 

The problem is that we didn’t know when to stop.  So Americans borrowed for a mortgage, and then a 2^nd mortgage.  We borrowed to buy a newer car—a nicer car than we could have ever afforded with cash.  Then we borrowed for nicer clothes, groceries, gasoline, cell phones, and trips to McDonald’s.  We didn’t even have to meet a loan officer or fill out much paperwork.  Just swipe the little card through the little machine and bingo—we walked out of Lowe’s with a new saw, out of the Gap with a new pair of slacks, out of Applebee’s with the sweetness of dessert still on our lips. 

 

That sweetness has turned sour for many of us.  Maybe it was unexpected medical bills.  Maybe you got layed off or business slowed or the car went in the shop.  Something happened.  You didn’t plan for ‘something’ to happen.  And now you are in trouble.  Big trouble.  The bills keep coming.  You are still paying off clothes and groceries that you used up months ago.  It’s harder to wake up in the morning when you feel this way.

 

It’s not just Americans.  America itself is finding it harder and harder to roll out of bed.  As a nation we may come soon to the point where we must finally confront the extravagance of our living over the last generation.  Our government has tried to put pressure on China for human rights abuses, unfair labor practices, and unbalanced trade policies.  China responded by threatening to dump billions of dollars of Treasury Bills on the open Market.  China owns something like $900 billion in US Treasury Bills.  Basically it means they’ve loaned us this money.  If they dump the TBills on the market, the value of the dollar plunges.  If that happens, our economy is in big trouble.  All this to say that because we have borrowed so freely, we are now owned.

 

How’s it feel?  Jesus came to set us free, but more and more of us have willingly enslaved ourselves to Visa, Mastercard, and Discover Card.  We’ve consumed too much.  And just as the world economy is undergoing a painful corrective, maybe it’s time for us to go through one too.  Several years ago, my family discovered the ministry of Dave Ramsey.  By following his advise and plan, we cut expenses, paid off debts, put a little away for a rainy day, started buying more with cash, and made a lifestyle commitment to get out and stay out of debt.  I don’t want to be a slave to anyone besides the one Lord by whom I am bound. 

 

If you want to get yourself free, but today you are despairing, check out Dave’s ministry at www.daveramsey.com.  Buy his Total Money Makeover, buy a CD, whatever works for you.  Tomorrow, you will be on the road to freedom.  And I must say, it is a great feeling to be becoming free!