Young & In Debt

[Yavin4]

Excerpt:
BUT WHEN SIWY wanted some wheels, he turned to the most popular financing plan for someone his age: a credit card. He put a new $7,000 motorcycle on a credit card with no interest for a year, and he plans to pay it off before the year runs out. But if he can’t, he says, he’ll switch it to another interest-free credit card.
“I had to have a motorcycle,” he said with a grin.
Siwy is part of a generation of consumers who have embraced and used debt in a way that no generation has before. The polar opposite of the postwar generation, which feared debt, today’s young adults view credit cards as a welcome and easy path to the lifestyle they see around them.
“What’s extraordinary is how quickly it’s changed,” said Robert D. Manning, a professor at the Rochester Institute of Technology and author of “Credit Card Nation.” “Now credit is an entitlement — it’s not connected to having a job and being a producer and understanding how much debt one can afford.”


Link: http://www.msnbc.com/news/1002396.asp?0cl=cR

Cheap debt is what's fueling this pathetic "recovery". Consumers have access to extremely cheap debt which is keeping the economy from totally falling off the cliff, but here's the down side. Next year, after the election, interest rates will start climbing higher and the cheap debt era will come crashing down.

[AP]

1. After the election, Bush wins, Bush passes the MBNA profit-protection act

which will make it much harder for people to get rid of credit card debt in bankruptcy.

So, you'll have your student loans and your credit card debt hanging around your neck for the rest of your life. Which means you'll accept very low wage jobs, and you'll be a wage slave for the rest of your life with all your labors making profits for big banks.

[The_Gopher]

2. screw MBNA and my 11K balance. i blame my govt for setting a poor example

i don't really blame them, but the book "CCN" does a good job of showing the triangle of debt of govt/business/and consumers that has gotten completely out of control.

[loudnclear]

29. Old and in debt!

Why should the rich be the only ones to enjoy life?

Wonder what would happen if we all claimed bankruptcy?

[LoneStarLiberal]

3. What Really Stinks About All This

What really stinks about all this is that whomever either proposes or is forced to implement the types of spending austerity programs it will take to pull our nation back from the brink of eternal indebtedness we are hanging over is one of two things:

1) A Republican bastard who, like Bush and his buddy Grover, wants to kill off all public assistance and most government structure; or

2) A one-term Democrat who will get blamed for everything and give us another Carter-to-Reagan dynamic in the White House.

I hope whomever our nominee will be will stick it to the Bush administration.

[Skittles]

4. what is wrong with these kids?

why do they feel such a sense of entitlement? My guess is they got it from watching their parents live beyond their means.

[The_Gopher]

5. can't simply blame the individual....

have to hold accountable the CC company that gives a college grad w/o a job a 15K credit limit at 0% APR for 6 months and then 18.99 after that.
CC companies are all over campuses. i applied for a card once just to get a free t-shirt. wasn't really thinking about the effect that applying to every card in town could have on my credit rating.
think back 20 years. did you get a credit card offer in the mail every other day? nope. used to be much more regulation to protect the consumer. but now, if you want to protect citizens, you're accused of wanting to infringe on freedoms and trying to turn the government into a nanny-state.
*sigh* i'm just pissed cuz it'll be years before i pay off the debt i ran up in my early to mid 20s.

[MadHound]

21. No, but the individual DOES bear responsibility for his/her choice

Yes, twenty years ago the CCs were everywhere on campus trying to entice people to get a card. You know what, I didn't. You know why, my parents and teachers taught me the basics of personal finance, and I resisted the standard consumerist mentality.

I agree, the CCs are like sharks in the water, constantly trolling for suckers. But it is up to you, your parents and teachers to have the proper information to resist these constant come ons. It is also up to you to not buy into the consumerist mentality that pervades our nation. I mean, c'mon, filling out an app just to get a free t-shirt?! That's ludicrous! Ever hear the old saying that you don't get nothing for free?

At least having a credit card you aren't discriminated against. Since I don't have one, and never will, I can neither rent a car from a major rental company, nor can I rent videos from Blockbuster. There may be other things that I can't do either, but you know what, I still think I got the better deal.

Next time ask yourself if you really need that DVD player, CD, whatever bad enough to pay extra for it? If not, then wait. Better yet, just cut up your cards and put yourself on a sensible budgeting plan. Then you won't have to worry about credit cards.

[Skittles]

37. excuse me

I never fell for their tactics; not all of us feel entitled to shit we cannot afford.

[K-W]

6. Economic Growth

the golden calf of the US economy, when consumers couldnt buy anymore, they had to go into debt, now the economy is tanking, people have no money, so the only way to keep up consumerism is to have people just going straight into debt. ITs the same thing with the government, the establishment will fight wars, go into massive consumer debt, and do anything within thier power before they let their growth slow or stop. Its the idiocy of our brand of capitalism that seems to think aiming for endless growth is a sane idea.

/me hops on his perpetual motion machine and rides away

[AP]

9. Banks have passed on responsibility of doing due-dilligence on lending to

the gov't.

They give everyone credit and then expect the government to bail them out by giving them helpful bankruptcy laws and every other benefit to ensure that they still make their profits.

[Wonk]

10. and watching TV shows like 90210 and The OC, for example (imho) nt

[AP]

14. enogh to say "watching TV." You don't need to qualify it by ID'ing a show.

All of TV and radio, for that matter, and all media is about encouraging you to consume.

[Yavin4]

18. Especially News Programs

which are becoming nothing more than informercials. Watch CNN's regular news for an hour and you'll see nothing but ads for products in the news itself.

[AP]

26. Exactly. Local news is every bit as bad.

Two of my favorite lead stories from the last couple years:

Fox Local affiliate: "Some people say you can't find affordable leather. We'll show you where."

NBC Local affiliate: "Friends co-starts sign new contract."

Those were the TEASERS for the LEAD stories!!!!

Sick.

[adriennel]

25. credit card companies target colleges

I don't know if they do this anymore, but when I was an undergrad, you couldn't walk two feet across campus without running into a booth to register for a credit card, or someone trying to get you to sign up for a credit card, or offers such as a free t-shirt, candy bar, chance to win a car, etc if you sign up for a credit card on the spot. These people were everywhere at the beginning of each semester. The credit card companies are targeting young people constantly! Young people that are usually "away from home" for the first time and have little to no budgetary experience are easy targets.

[info being]

7. I agree

I'm 28 and all my friends are getting way over their heads. I started saving 3 years ago and never regret not having everything they do. They are on a train that is headed for a wreck but they can't seem to see it.

[K-W]

8. Like every good middle class college student

I am starting my adult life in debt for college loans, but I plan to work those debts off as fast as I can and then live within my means. I'm not going to get sucked in the consumerist crap fest that can only lead to some kind of catastrophic depression.

[Cronus Protagonist]

11. Cheap debt, until you're late on a payment

Then you're hit with usurious rates. I just tore up an offer for a new card with 0% interest for 6 months and 6% thereafter. I read the small print. If I'm late with a single payment, the rate goes to 27.99% variable - that is a rate that's impossible to pay off. It's almost a lifetime debt for someone earning a middle class salary or less.

Needless to say I shredded the offer.

FUCK BUSH Buttons, Stickers & Magnets

[BiggJawn]

12. Old and in Debt.

Sometimes I wish I could get more credit cards with as high a limit as easily as the college-aged dudes and dudettes.
But I've already "crashed and burned" and so they'll only "trust" me with a $500 card at 21%.

But hey, it's only 3 $500 credit cards and a top-heavy 15 kilobuck truck that's worth only 11 kilobucks...
Better than a $7000 motorcycle...

[Yavin4]

13. Without Consumers, The Economy Would Be In The Toilet

completely. The only reason why the stock market is up and the GDP is up is two years of record low interest policies from the Federal Reserve. Anyone remember 0% financing on cars? This cheap debt policy is what's making it easy for young people to run up massive amount of debt in addition to their student loans. The problem is that the economy is not producing enough jobs for these people to work off their debts. Also, the cheap debt policy will come to an end next year, and Bush will revise the bankruptcy laws which will make unpaid debts permanent.

[AP]

17. The economy is running on the fumes of consumption, and not the fuel of

wealth creation.

From the late 40s to 1972, the economy grew because the middle and working class accumulated wealth, and leveraged their own growth and valuable assets and real income potential. They created all the social wealth which lifted all boats.

The last 30 years have been about transferring that wealth to the wealthy, and reducing the asset value and income potential of the middle and working class.

Consumption fueled by people taking loans on over-valued assets or even NO assets (like credit cards, and othe unsecured loans) amounts to leveraging a future that isn't going to be there.

This economy is in so much trouble unless a Democrat gets elected who's willing to do what America did durin the golden age of economic growth -- ie, build up wealth in the middle and working class, rather than keep putting them in debt and taxing the hell out of them.

[dawgman]

20. Wealth is a finite resource. It cannot be created or destroyed.

It can only be redistributed. The truly wealthy in this country have merely been taking back what was "rightfully" theirs for the last 30 years. There is no less wealth in our economy than their ever was, it is merely being siphoned away from the middle and lower classes and redistributed to the already rich and powerful.

[AP]

27. Wealth can be created. New inventions and new ideas create new wealth.

They change the value of labor, increase free time, give people more options. Population growth changes wealth scales too.

I agree that wealth distribution is a critical aspect of wealth. But it's also true, I believe, that wealth increases.

In many ways, the simple fact that wealth gets more evenly distributed can create more wealth, becuase it gives more people access to inventiveness, free time, and other options which, in turn, create more wealth.

The inventors of computers perhaps took a little wealth from the people who controlled punch cards (woops, same people) but they also created a lot of wealth.

Are you saying that there is the same amount of wealth today as there was in 1800 or 1500? I

[dawgman]

35. wealth is nothing but an expression of controlled resources.

Resources are finite therefore wealth is finite. Some people think up creative new ways of using the resources that are controlled but they don't actually create new resources.

[Famine]

28. Are you quoting someone?

Pardon me, but that's just a ridiculous thing to say. Do you really believe there is no more wealth today than there was 10 years ago? Thirty years? 100 years?

Every mineral mined from the ground, every house built, every business created is an increase in wealth. They more than compensate for the numbers of resources used up, houses torn down and business that disappear.

Wealth is constantly being created. Its what most of us do all day long.

[AP]

30. Futhermore...

...the labour that goes into converting raw materials into value products adds wealth.

Nobody owned that labour first. Every indiividual born who's willing to sweat and create something is creating wealth.

Some king migh have owned the land which contained the raw materials. But they didn't have as a high a value until there were people willing to convert the raw materials into a something and a wealthy marketplace of middle, working and upper class peopel creating a demand for the products.

[GreenPartyVoter]

15. Glad I went bankrupt already

It's going to be harder and harder for folks (not corporations, mind you) to do so.

Will never own another credit card again. Ever.

[veganwitch]

16. got rid of mine

700 more dollars and i will be debt free.

[Ksec]

19. Banks suck

I deposited 1500 bucks into my checking account on the 1st, on the third I wrote out two checks for about 500 bucks, They came back insufficient Funds. Turns out the bank deposited my money IN THE WRONG PERSONS ACCOUNT! They tried to charge me 60 dollars for their screwup! Im done with em. My money will stay in MY safe from now on.

[NNN0LHI]

22. My brother is out today looking for a plasma TV with 10 grand from a...

...one year interest free loan. It boggles my mind, but its his money...er, a debt.

Don

[Romulus]

23. I always wondered

who the *F* was buying that stuff I see at Circuit City/Best Buy. I swear, those places are always jam-packed full of people buying all kinds of expensive crap. Looking around, I wondered what happened to the whole job-loss thing - no one there seemed to mind spending thousands of $$$ on stuff they really could get along without having.

I guess they were all Visa/MC shoppers :shrug:

Don't get me started on the implications of this credit card nation lifestyle-thing in relation to all those damn McMansions springing up with multiple "luxury SUV's" parked in the driveways . . . .

[dawgman]

24. My stepson's father is a single guy who has a 4,000 square foot house

about a block from lake washington with the 60-something inch plasma screen tv and a lexus. He paid the downpayment for his house with His visa, is leasing the car and has unreported in store credit for the TV. He has two illegitimate kids, and can't afford to put any furniture into his huge (but shabbily built) house. The kids, when they come over, either sleep on the floor or in his bed, the only one in the house, with him.

He is the vision of the modern american...living way beyond his means and he can't wait to buy another car or TV (whatever he can get a better rate on). HE also does the credit card shuffle on a regular basis...he pays the payment for one card with a different card.

Well, at least rates are low....

[Yavin4]

31. Your Stepson's Father Is Keeping This Economy Together

When you read and hear about 8% GDP growth, think about your stepson's father because that's where it's coming from.

[info being]

32. That's unbelievable

I'm practically his neighbor (in Bellevue, I presume). I often wonder how many of the luxury car owners I see shopping in Bellevue are in dept vs. just incredibly wealthy. I'll keep a load of money in the bank, live in an apartment, and drive my '96 RAV4, thank you.

On edit...the only problem is that my savings are eroding because of the fall of the dollar. Sometimes you can't win.

[dawgman]

33. he's south of bellevue, whatever they call that area...kennydale or

something...used to be renton by coulon state park.

[Kitsune]

34. I do not have and never will get a credit card.

The idea of buying something I don't have enough money for RIGHT NOW makes no sense to me at all.

[bleedingheart]

36. There is a term for this kind of person - Idiot

Sorry butI have no empathy for a person who buys something they clearly can't afford because they "have to have it"...

What ever happened to common sense?

Now I can empathize with the individual who runs up debt for medical bills or for something essential...but a motorcycle?

The problem is that this idiot won't stop at the bike...the costs will escalate because they will have to have all the nifty accessories and other gadgetry that comes with owning the bike..

Its a downward spiral towards credit card indentured servitude.

This is a big problem in this nation.