The Credit Debt nation- the Coming Economic Disaster

While the stock market exhuberantly jumped during the great dotcom debacle in the late 90s, Clinton fiddled while the country prepared to burn. Over the past 10 years, though mortgages were relatively cheaper than almost any other time in US history, usurious lenders, knowing their prey couldn't keep up with the inevitable rise in payments, encouraged people to overbuy and underfinance their homes. With glee, they profited. A day late and a dollar short to the party, the economic chiefs of the federal government once again act surprised at the shock to the economy. But let me tell you right now that those two events, certainly the first far more damaging to portfolios and retirement funds than the second, are NOTHING compared to what is about to happen over the next year as the market falls and sucks under the millions of Americans who live with crushing credit card debt. Just as no one addressed the stupidity of IPO's for companies that made nothing and had nothing yet sold for hundreds of dollars per share, and just as no one addressed the mortgage industry in collusion with housing inspectors and greedy realtors as they encouraged people to stretch beyond their means resulting in the current housing mess, yep, just as those things brought down Wall Street, so will the rampant issuing of credit to people who cannot pay their bills. As people refinance, they will be at higher levels of mortgage payments. As the housing market cools, their house value falls. They are paying for a house that is not worth what they paid for it. But pay for it they must. And as the market decompresses like a leaky balloon, so will jobs and pay. As gas rises and the expense of utilities rises, the pay check of all Americans will shrink. But most importantly, these very same people- and it is too easy to call them irresponsible- will no longer pay even the most minimal of their credit card payments. Credit card companies exist not for the convenience of everyday life, but for the usurious practice of punishing non-payments. At some point, the interest rate on the unpaid balance is laughable. There is no point in the debtor paying as the items they financed are now distant memories. They no longer even remember what they bought. We are a shamelessly acquisitive society. And millions do it on someone else's dime. When the payments stop, when the credit card company now has unpaid debt at levels in the billions, the house of credit cards will collapse. It will make the dotcom and housing busts look like minor blips. The federal government, which has loved having its nose in almost everyone's business, has ignored this sleeping giant of disaster. And it isn't the fault of the "rich"- it is the fault of EVERYONE who has one (or a hundred) maxed out credit cards whose limits were raised over and over and over by the greedy credit card companies and the stupid, greedy people who have used them as a lending institution rather than getting a loan. If you are in credit card debt, get the hell out of it. Pay your bills honestly. Bankruptcy is for thieves. The credit card companies need to be stopped from having lending rates over the current competitive interest rates. No more 25% interest rates. They should be forced to limit credit for people with unpaid balances, not extend it. It is time to stop this problem before it decimates our economy. Be sure you have stop sell orders on your stocks. Because it certainly looks like we are all in for trouble. And it will be the people who actually pay their bills who get hurt the worst. But if you think you are safe because you haven't gotten into the stock market, you aren't. When the economy derails, when people are hurt financially, everything from schools to the arts are in jeopardy. Do what you have to do to protect yourself, and don't spend money you don't have. Like your grandparents were proud to do.