Letters to the Editor
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Usury
Admittedly I didn't read all the letters, and sure personal resonsibility is a given. But I haven't read any mention of the word "usury."
When I was a child, pre-Reagan, it was against the law for banks to charge more than something like 10% interest. Then cam stagflation with periods of double digit inflation and the porr banks couldn't make money on their 10% loans. So the usury laws were lifted, and now we have these sudden loan shark interest rates if you're late on your payment.
I highly reccomend Paul Grignon's "Money as Debt" to explain how banks actually create money.
While it's no excuse to let credit card companies control our lives when they loan us money, there is a side to the way banking works that plays a role in how we end up in debt:
Allowing banks to charge 30 percent interest is what makes credit cards for people who can't really afford them possible. Atr those kind of interest rates, one late payment can start a debt sprial. Suddenly what we "owe" on $1000 loan is not $100, but $300. That's just simply not right. Oh yeah, we "agree" to it - the language is buried in those 30 page 4 point indecipheraable pamphlets they send us when we decide the 3% APR looks like a good deal.
Balance folks. It's called "regulation." The banks are being allowed to rob us blind. It's long past time we re-enacted usury laws.
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More horrible advice!
"Her debt itself is laughable small -- $10,700? please! that's the cost of a SMALL USED CAR. Modestly-off individuals all over the place manage to purchase and pay off small used cars over a 3-4 year period of time. And the minimum credit card payment on $10K would be awfully small -- well under $100 a month."
Wow, you are all sorts of clueless. Do you know how much money she would have spent paying off that amount at the minimum payment rate?
First of all, her interest rate would be something like 17% or higher - that means a minimum payment of roughly $270. Plug that into bankrate.com and you get the following:
"It will take you 389 months to be rid of your debt. In that time, you will pay $15,665.24 in interest."
That's right - 32 years to pay off a credit card. I think emptying a 401K, getting rid of the debt, and starting over again with the 401K makes more sense.
Yes, the author may seem like a spoiled, rich brat to you, but she made the right decision. I've been through what she's going through. Our story is incredibly common, regardless of our issues of entitlement.
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Bad Things
"Bad things, terrible things, happen to people every day, things beyond their control or wildest imagination that can ruin them in a heartbeat. And no amount of planning, budgeting, or sanctimonious pontificating by internet blowhards is going to be able to stop it."
This is true for the US. Medical bills do not bankrupt people in Sweden or France or Canada. Internet pontificating won't do a thing. Demanding actions from politicians might. Remember, Canadians had to fight the medical establishment for a health care system back in the sixties. They won; Americans lost.
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Freelancing can be a very responsible choice
I worked for corporations for 3 years before I started my business. The first corporate job lasted 2 years, and then I got laid off. I had some savings, I job-hunted like crazy, and found another job in 3 weeks. That job lasted a year. I was not so lucky with my job-hunting, either (it was during the tech crash, and I was an engineer). Eventually, I said "Screw it" and started freelancing. As I mentioned in a previous letter, I paid off my entire $16,000 credit card debt this way.
The nice thing about freelancing is that if you lose one client, all you've lost is that one client. You don't lose your entire income - there are always other clients. If you're multi-skilled, there are always other areas of expertise, too (I was doing mechanical design, tutoring, piano playing, and translation)
Moreover, working for yourself is very meritocratic. If you're good at what you do and good at advertising yourself, you'll get clients. If you aren't, you won't. There is no corporate backbiting, no scheming, no sleeping with the boss to get yourself promoted. It's just you and the client - if you give the client what he wants and don't cheat him, he'll come back.
I stopped worrying about job security the moment I started my businesses. Even though I'm no longer self-employed this way (I've gone back to school), I know that this option is there and that I will never be truly unemployed, or desperate the way that I used to be. I may need to work for others for a few years after graduating, but I will get back to self-employment as soon as I feel competent enough in my new area of expertise.
Moreover, every successfully self-employed person I know is very happy with their job. They don't need to worry about "work-life balance" - they choose when and where they need to work. They don't need to worry about whether their employer allows them to take lunch breaks or bathroom breaks, to make personal phone calls or to surf the Web, to take time off to watch their kids, or to take care of countless daily errands. They don't need to worry about being at work precisely by 9 - they can set up their working hours however they like.
It is true that successful self-employment requires self-discipline, organization, and a sense of responsibility, which not everyone has. But it really doesn't take that much. All it requires is taking the business seriously and realizing that your work is important to others.
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I can't believe it would be that huge a disaster
"Someone made a comment here about what would happen if we followed the so-wise advise of many here: the U.S. and probably the world economy would collapse."
This presupposes that the whole of western civilization is artificial bullshit, that the whole thing is a house of cards, depending only on everyone believing in it, like Tinkerbell, and I think I dispute that. The food is actually grown and distributed, houses and apartment complexes are built, people are cured of real disease, and all the people who provide these services are compensated adequately in currency which they can use to enjoy their lives. That's not bullshit.
I believe that only the bullshit part of the economy would collapse. While many people do, most people don't work in bullshit jobs doing bullshit things. The food would still get grown, and houses would still be built if people actually started saving money and stopped living on credit, and those people would be paid. Maybe not as much, but they'd get paid, and they'd keep doing it. Someone would still make TV shows, someone would build office and computing machines, etc. We'd still have cops and mailmen. Life would go on.
Our existence in this country is simply not as silly as all that. The Russians survived communism, because most of the function of civilization is simply in providing basics, and they could do that as well as anyone, because the basics just aren't that hard.
Retail would certainly change. I've got to figure companies like Best Buy and Circuit City thrive on credit spending, especially with come-ons like "Last chance to buy this 65" HDTV before the big game! 36 months no interest!", would cease to exist overnight.
The retail outlets that remain might be the ones who've been calmly plodding along for decades, like Sears.