Thursday, March 20, 2008

The National Debt

In an otherwise largely vitriolic opinion piece, Robert Scheer sad something painfully true in the San Francisco Chronicle today.
The Bear Sterns bailout "was made possible only by the federal government using your tax dollars to pick up the bad debt of the banks. Tape that picture to your wall to remind you, when you open a credit-card bill with a 30 percent interest rate - not the 2 percent the fed will charge banks - or see the increase in your adjustable-rate mortgage, of just what your government will do for the really big guys that it will never do for regular folks
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/19/EDVOVLURS.DTL
So who is the real victim?

Today I spent away a sizable tax refund on paying off three separate private education loans. It is such a relief to be free of these relatively higher interest debts (9-12%). The rest of my college was paid for by Northwestern's endowment and federally subzisdized loans with fixed interest rates of around 6%. It was only until December of this year that I managed not to carry a credit card balance since my second year of college. I say this, because in general I feel like I have been overall responsible with money. I've tried to avoid being a slave to it, while at the same time not being afraid to use it to my advantage. Credit cards in college allowed me to experience a lot of things that I would have been left out of, and still manage to purchase the required textbooks. I remember accidentally missing a monthly payment during my junior year of college and watching my interest rate skyrocket. I am no math major, but I realized that at the rate I had, even on a relatively small balance, it would literally take years at the minimum payment to pay the debt off. I told the friendly customer service operator this, and after haggling, I got my low interest rate back. Just like that, a click of the button. I think that's when I realized for the first time, fully, the fact that the credit card company really didn't want me to pay them back. When I realized that I was sort of disgusted, but I also knew that the joke was on me. I could plead ignorance, or I could face the music. There's a price for everything- it was my debt after all. My road trips, bar tab, spring break...
So who is the real victim?

The truth is, we all are. Victims often of our own greed. People bought houses they couldn't afford because of greed. Banks gave loans on dubious terms because of greed. And of course, this is all the President's fault.

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