Credit Cards are Unfair and Deceptive

Another reason to start living within our means.

Another reason to live interdependently instead of independently.

The Story of Stuff

This video is a little bit off topic, but it does talk about globalization. Globalization is the reason we have low wages, which is what produced the need to even have credit to begin with.

The Crisis of Credit

This video does a REALLY good job at explaining the credit crisis.

It's short and visually-appealing.

Home Prices and Credit

Home prices continue their fall.

What really started the descent was when the realization sunk into the mass market consciousness that all of the people who wanted to buy a house had already done so. The market was saturated. There were many investors, both domestic and foreign, pouring billions into these homes, with the expectation that SOMEONE would buy them. These investors were the chief source of revenue for developers. Then once that realization set in that the market was saturated, that was the first domino to fall.

So, if home prices have fallen by almost half, shouldn't the $12 trillion in mortgages that Americans have fall in half too? Shouldn't that be around $6 trillion instead?

Statute of Limitations

If you go down to the bottom of this page, you'll find the state by state listing of the statute of limitations on debt.

Thanks to Preesi!

Automobile Industry Collapse and Credit

In another example of how debt-based economic expansion has resulted in nothing more than an over-inflated false economy, the automobile industry which relied exclusively on sales through consumer credit for much of its growth and stability now faces bankruptcy if nothing is done soon.

Considering, the competitive constraints of the global marketplace and the resultant downward pressure on wages, is it possible to make a car in which considerable financing is NOT required?

Something that's cheap, gets me from point A to point B and does so in an economical way would do just fine.

Stagnant Wages Led to the Use of Credit

It really infuriates the hell out of me when people try to put all of the blame on the "irresponsible consumer who went in over his head." There's plenty of blame to go around, I assure you. Inflation-adjusted American wages have remained stagnant since 1975 but the cost of living has done nothing but increase. This contributes to the use of credit. This is why we have $2.5 trillion in consumer debt (excluding the $12 trillion in mortgage debt).

American businesses have been financing the true costs of low wages with consumer credit. As long as there's distance between debt and income, there's no problem with the system. The pain of the difference between debt and income was numbed-out with credit. If there's no pain, then there's no problem.

What caused this downward pressure on wages? The outsourcing of the good-paying manufacturing jobs certainly contributed a good deal to it. The jobs that remained after such outsourcing were either low-paying service sector jobs or professional jobs that you had to go to college for (which meant student loans).

I'm one to believe that we are not in a recession. We are in a standard of living correction. We have lived beyond our means for way too long and now it's time to live like the rest of the world.

Samantha Hillstrom

Samantha, production assistant for CNN, racked up $115,000 and even for someone who got a good-paying job like she did, the payments are just too much:

"I am 23-years-old, two years out of college and I am sitting on $115,000 of student debt with only roughly 12 years to pay it off because of the financial crisis. How much does that make my monthly payment, you ask? A whopping $1,200 a month. And let’s just say my lifelong dream career in television doesn’t lend itself to that. The only option my bank is giving me is to go on 'graduated repayment plan.'"

Changing the focus of the blog

My buddy Penelope Trunk has advised that I expand the focus of this blog. So, I'm going to include ALL kinds of loans, not just student loans. Over the next couple of days, as the Obama Administration takes on the topic of student loans, I will continue to cover that, but as we go further along, I will expand my reach into all kinds of other loans.

But what they still don't get is...

The Obama Administration certainly seems to have good intentions as it meets Tuesday to discuss reforming student loans. But as there seems to be a disconnect between the idea of clearing bad debt from off the balance sheets of the banks and long term inflation-adjusted stagnant wages, there's also a disconnect between giving student loans and then expecting students to find the jobs they need to pay for the loans.

Shall we now begin to only give loans to students who major in a "marketable" field? How discriminatory would that be? That would mean less funding for students who major in the Arts and Humanities, for instance. This would result in a warped society. Surely, the Obama Administration expects these students to have JOBS when they get out of college to pay these loans?

Student Loan Defaults Rise!

"Student-loan default rates for people who recently left school rose to 6.9 percent from 5.2 percent a year earlier as a deteriorating economy weighed on borrowers, the U.S. government said. "

Here is the link

Just let it go!!! They can't take your degree away!

Obama on Student Loans

"With the Obama administration proposing to cut private lenders out of the federal student-loan business, financial companies are intensifying efforts preserve their role."

Here is the link

I wasn't expecting the Wall Street Journal to publish an article like this. This is sweet! It looks like I created this blog with good timing.

Zeigeist Addendum

And here's another explanation of the fraud that is the banking system .

They also give a great interview with John Perkins, author of "Confessions of an Economic Hit Man," as well as one with the creators of the Venus Project, which presents an alternative society that is not based on money.

Why I created this blog

Education should be a right, not a privilege. The banks should not be profiting from something that should be a right. The government should fully fund education at all levels. If people want to keep going to school till they get a PhD, I think they should be able to do so. Money should not be an issue. They should keep at least a C-average before advancing to the next level, but money should not be an issue.

Currently, I owe over $100,000 in student loans and I'm not paying ANY of it back! If you owe student loans, then you shouldn't pay on them either. They can keep calling me and harassing me if I'm the only one to do this, but if all of us do this, we could make history.

Besides, it's not like they actually HAD money to lend to us or to use to consolidate our loans (for an exorbitant fee). They make this money out of THIN AIR!! If you don't believe me, go watch "Money as Debt."