Changa

April
26th

Say Anything


So for several days Obama has been telling us that we have several options on the deficit, but that "the one thing we cannot do, is nothing."

This reminds me of my own financial difficulties, and being an idiot has taught me some things. I managed to dig myself into a hole that was slightly larger than my annual salary - a $42k hole. Every month I made at least the minimum payment on all my debts, and I put any extra money I had towards paying down my debts. Then by the end of the month, my family would get hungry, and I'd pull out a credit card and buy food. Between the money I spent and the interest I paid, I found the hole getting deeper every month. On the other hand, my credit score climbed every time I checked, allowing me to borrow even more!

I knew that the only solution was to do nothing. I paid each card $5 per month, so they could not really claim I was ignoring them, changed my phone number and hunkered down for 5 months. During that time, we borrowed zero dollars from anyone, and simply lived within our means. I made no effort to lower my debt. I did continue to make the 2 largest payments, one to my aunt and one that my uncle had co-signed. I do not subscribe to the now popular "screw family first" economic doctrine: I would rather have a bad credit rating with the bureaus than with my family. At the end of those 5 months, I'd managed to save up pretty much nothing, and I'd managed to plummet my credit score to its lowest point ever. I also got sent to collections by one of the cards, because I accidentally screwed up on calling them that sixth month. That gets paid off in full in May.

Two years later, I'm back down to where I was 6 years ago, and falling fast. Now that I have paid off several larger debts, I am contributing that money to a savings account which I plan to use to cover emergencies, and as it gets large enough, negotiate settlements for some of the cards. My credit rating is also looking OK again.

Now, I am not the USA. The USA has a far better credit rating than I ever could, and in no danger of defaulting within my lifetime. We have 3 wars that will expire on their own if congress simply let them, saving us a few trillion dollars. Our retirement programs are running well in the black, although predictions for several decades from now are grim, in that we should probably increase your social security payment by a couple dollars a week in order to keep it completely in the black forever - or raise the cap so that billionaires are required to pay a small income percentage rather than a small flat fee, but all that can be done in 2020, or 2030. Doing nothing is a far better option than anything being negotiated now.