Savings was a virtue taught to our fore-fathers. They worked hard, saved and invested for a better future and retirement. That was the principle of money management and investment philosophy. The core teaching was NOT to spend beyond the means. Children were given piggy banks (clay money boxes) to drop the savings into. Every dime was cherished. When the piggy-bank is filled up, it is broken and the contents counted and put in the bank for interest. Little by little, wealth is accumulated. Debt was taboo. In fact some cultures see debt as a shame. “Those were the days when debt was equated with evil and semi-bankruptcy. People hesitated to take out a mortgage. When mortgages were paid off, there were frequently mortgage parties.” (King World News)
But alas, the economic globe has rotated from the sun-lit face into the dark shadows. Economics today is a far cry from just a few decades ago. Economic theory is premised upon the mantra that growth is a result of spending. Spending replaces thrift and savings. Principles of thrift are now scorned upon. Economists and banksters encouraged borrowings to the hilt so that we may enjoy life before we drop dead. People literally lived on margins. The “smart guy” in smart suit is geared to the point where he is just able to finance his debt. That is considered shrewd. Their financial status is governed not just by earnings, but by the ability to pay interest. A rise in interest rates on the debt can be totally devastating for those living on the edge. Nobody saves anymore. Savers are idiots and the word “saving” is laughed upon. When it comes to government spending, the scenario is even more nightmarish. Governments all over the world borrow so much that repayment is almost an impossibility, even at zero interest rates. But that’s the government. A government can just default. So why not spend as there is no liability!
King World News – It’s Terrifying To Look At What’s Really Happening In The U.S.
“A wise saying goes like this; “Those who do not remember history are condemned to repeat it.” So ask yourself: What is the fate of those who seem to have no recollection of events just a few years ago?
We are nearing the end of 2014, and to the debt markets it is almost as if the 2008 economic collapse never happened. It appears that borrowers and lenders are suffering from a severe case of collective amnesia. Yes, consumer debt levels took a slight breather in 2009-10. But today total consumer credit in the United States has risen by 22 percent over the past three years, and at this point 56 percent of all Americans have a subprime credit rating….
By the end of 2014 total U.S. credit card debt is expected to rise by $54.8 billion and average household credit card debt will surpass the $7,000 mark, reaching levels not witnessed since the end of 2010. Adding to these disturbing figures is student loan debt that is at a nationwide all-time record of $1.2 trillion, which is an 84 percent jump since the Great Recession of 2008.
Almost 19 percent of student loan borrowers owe more than $50,000, according to a report published recently by the Federal Reserve. Only 6 percent of borrowers had that much debt in 2001. Student loan debt now outstrips credit card and auto loan debt in America. And speaking of auto loan debt, during the first quarter of this year, the average vehicle loan soared to a record high of $27,612. Five years ago that number was just $24,174.
The financial crisis of 2008 was born out of a romance between the U.S. consumer’s insatiable desire to spend and financial institutions’ voracious desire to issue debt, which compelled them to lend money regardless of the borrower’s ability to make payments. In 2008 this dysfunctional relationship ended badly and both parties swore each other off. But, with the Fed in the background playing the violin, recent data shows today these two lovebirds can’t stay away from each other.”
For the Lord thy God blesseth thee, as he promised thee: and thou shalt lend unto many nations, but thou shalt not borrow; and thou shalt reign over many nations, but they shall not reign over thee.