Debt Solutions

Unless you've been living under a rock somewhere, you've noticed in the past couple of years an enormous growth in the "debt industry." (I'm not sure it is an industry, but it sure is behaving like one!) The radio and TV ads, the pop-up ads on the Internet, and even ads in newspapers. They all ask you if you're fed up with credit card debt. Basically they want you to agree with them on the definition of the problem ... for which they conveniently have a "solution."

They purport to give you hope by telling you they can help you. Many explain that a new law, a little known law, or simply your "rights" make it possible to settle your debts for less than you owe. Some of the nastier ones cast the lenders and creditors as villains in some kind of an evil scheme that victimized you, the debtor.

It's fair to say that having too much debt is a bit of a problem. Americans are carrying more (personal) debt than any other people group in the history of the world. We have big mortgages, big car payments, big credit card balances, etc. But is debt really the problem? Or is it maybe a symptom of the root problem?

It's like being obese. We all think the problem is the extra weight we're carrying around. We use the bathroom scale to measure our weight and try to track that. But at the end of the day, how much you or I weigh isn't the point. Rather the point is what we eat. Obesity is a symptom of the bigger problem ... our eating habits. And so it is with debt I think.

Americans live large. As a nation we've lived large for quite some time now. We're involved in everything everywhere. It seems that no matter where there's a conflict (war), disaster or even political event - the U.S. is involved. We are perhaps the most influential country in the history of the world (that hasn't had sovereignty over those it influenced).

As individuals, we tend to live just about as large. Even the poorest of our citizens will have satellite TV, a nice car or other things they really shouldn't afford even if they can. Compared to Germans, for example, we live on a spectrum that is more like a polar opposite.

Consider the German culture is to define their lifestyle within the confines of their finances. They look at how much money they have and then determine how they will live. Americans on the other hand, do it quite differently. How much money we have is not really part of our decision criteria. We seem to define how we want to live, and then spend the rest of our time trying to make our finances obey our lifestyle. And as the popular Dr. Phil would say, "How's that workin' for ya?"

I've become a big fan of Peter G. Peterson, a respected business leader who put $1 billion of his wealth into a foundation (http://www.pgpf.org/) dedicated to fighting the national debt. He backed the movie, I.O.U.S.A. that really was a documentary on America's unbridled spending and unprecedented debt. He's been campaigning to make the national debt a key issue on the political agenda of our nation, and even of the world.

Recently, Peterson produced a five-part follow-up called "I.O.U.S.A.: Solutions." Here he talks about what needs to happen to put America back on firm financial footing. Check that out at http://www.iousathemovie.com/.

We Americans seem to be trapped in some kind of time warp that is disconnected from reality. We're living large. We're living much, much larger than we can afford. Somehow, we need to find room in our budget to retire the astronomical debt this nation (and its people) carries.

But more importantly, as Peterson points out in his solutions piece, America and the Americans need a whole new thinking process when it comes to finances. The paradigm must shift to whether or not we have the money to pay for a war, assist the poor, advance an agenda, etc.

So it would seem that the best "debt solutions" have yet to appear in the American culture. For the true debt solutions will have to come from an extremely significant revolution in our thinking about money and how we live.

Are you ready?

National Finances

With the current financial crises, it seems that the U.S. government (among other western governments) is stepping up to fill the financial holes in lots of things. Bailing out this or that, subsidizing this or that, guaranteeing, buying and even seizing companies and industries. The market tends to react favorably. This week, when the government stepped up to put hundreds of billions more into Citibank, the stock market rallied impressively. Clearly Wall Street was happy to see the U.S. government shelling out hundreds of billions on Citibank. It must have made the market feel secure.

But is it really true? Is it a fact that the hands of the U.S. government make something safer? Does the government really have that kind of money at its disposal? Will the government really have to pay these bills it's putting its name on? If so when? At what cost? I suspect that many Americans just don't have a clue as to the real answers to questions such as these. But the government is huge, the numbers are abstract, and it seems to take care of a perceived need. After all, Citibank was "too big to fail." But let me ask you: Is the U.S. government too big to fail?

I don't make a habit of endorsing the web sites or blogs of other people. But today, I'm going to make an exception. I encourage you to visit http://www.pgpf.org/ immediately. It is the web site of the Peter G. Peterson Foundation. Mr. Peterson is still alive; he's the founder of the Blackstone Group, a well known and well funded investment house. He's also a billionaire who is pouring most of his wealth into fighting problems that he thinks threaten the very foundations of America. I think he's right.

I have blogged before about the National Debt. It is a larger debt than has ever been known in the history of the world. The Peterson Foundation provides a quick education about what that looks like and what it means. They assemble facts from various sources (all of which they identify) and simply provide the education for you to know the truth. If you agree with Mr. Peterson that the issues are important and deserve to be addressed, then the web site tells you how you can get involved and join Mr. Peterson in fighting these grave threats.

I know, I know --- nobody likes to talk about problems or the national debt. It's too big to understand and solving it seems to complex for my simple mind. So I'll just not worry about it and try to be happy. Well, that may work if you plan to die in the next few years. But if you plan to live in this country for a few more years or have loved ones that do, this concerns you. Please, go visit the Peterson Foundation web site. Get a quick education about the facts and then look me in the eye and tell me that this isn't really that big of a deal.