Now that Christmas is past and were quickly moving into the new year, once again, many people over did it with their holiday spending. I know it’s easy to do when you have available credit on your credit cards. I have found myself many times being a victim of that kick the can down the road financial policy for my home. Until recently, I have now tried to be more realistic with the wife and kids letting them know that we should be practical in our gift giving. I mean who really needs a 70 inch big screen TV to watch football on? Corporate America has done a good job blurring the lines between our needs and our wants. What that is that children and young adults of today are growing up under a delusion that all this is for real. The only thing that is real, is those bills that come in the mail at the end of the month that we can’t afford. Many people are trying to keep their credit rating high so they can get more credit and go deeper in debt just to keep up the appearance that everything is just fine.
Recently, a study came out showing that the majority of Americans were three weeks away from filing bankruptcy. It’s no surprise to find out this fact when we see that the income to debt ratio of the average American is now at 154%. The only reason the bankruptcy filing numbers have continued to decline is banks are allowing these people to leverage themselves further. The average American in 2008 had approximately $4000 in credit card debt. At the end of 2013, that number had climbed to just about $16,000. During the same timeframe the median income per household has also declined by $4000 per year. This is nothing more than a recipe for individuals having unsustainable debt that ends up in a bankruptcy filing.
Let’s face it, the citizens are broken so is the government. The US debt has now surpassed 105% of GDP and no one seems to care. Instead, Congress is asking for the debt ceiling to be raised so we could be 120% of the GDP I guess. I think our politicians are completely out of touch and as they continue to make bad Decisions Main St., America continues to suffer. In 2010, the US saw a record number of individuals filing bankruptcy to the tune of 1.6 million. Although that number has now declined to 1.1 million, many are predicting new records to be set over the next couple years. Recently it was reported that there were over 5 million homes in the US in some stage of foreclosure. The news continues to report that real estate was now recovering and everything is better. I guess the news reporter didn’t read all the statistics that are important to make that statement. Only time will tell whether this Keynesian form of government will fail or work for the first time in history. I’m putting my money on failure. Although there is only so much we can do to change our government, we can’t change the way we live and try to get back on the road to becoming debt-free even if it means filing bankruptcy.