Credit Crisis Has a Silver Lining

The current credit crisis has hurt most people in America. From small businesses who rely on ready credit to finance their inventory until it is sold, to individuals watching credit card companies jack up their interest rates for no good reason, most of us are feeling betrayed.

We Americans have gotten into the habit of living beyond our means. We got used to easy credit. You can’t afford it? No problem, just put it on your credit card at only 9% interest. Whoops, we posted your payment a day late, so NOW, you are subject to the default rate of 29%. Want a $300,000 house, but bring in only $50,000 per year? No problem, we have a mortgage just for you.

Then *POP*. There went that bubble. So, where’s that silver lining?

We have a way to go, but those of us caught up in that bubble burst are having to re-prioritize our expenses and find ways to pay off our current debt without taking on any more. Here’s the silver lining part. Once we re-align our finances and work our way back to solvency, which admittedly can take several years, we will be in a much better financial position. We will also have the lessons learned from these years to take into our later years. We will be more wary of credit and use it more wisely. We will be able to spot questionable mortgages and steer towards the more conventional fixed-rate loans that have been proven to ride out the hard times.

We have to work hard to pay down, or pay off the debt we have now to bring our debt ratio down to something much more manageable, but we can do it. We may have to trade that Hawaiian vacation for something closer to home, put off buying that new car for a couple more years, or waiting to pay cash instead of dropping more onto the credit cards, but the payoff will be worth it.

Our silver lining is that once we survive and fight our way back, we will be all the much stronger financially.

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New President – New Economy?

Apparently, Americans were ready for a change.  A new president, Barack Obama, will be sworn in January.  It’s no surprise that the economy was one of the factors driving this election.  President Bush is being blamed, rightly or wrongly, for the current economic crisis and people were afraid of 4 more years of the same thing.  McCain could not shake the Bush Stigma that seemed to be attached to him.

However, if you are expecting a magic bullet to shatter the economic woes of this country, I think you may be heading for  disappointment.  It took time for this country to get into this mess, and it will take some time for us to get out of it.  People are quick to blame a new president for his predecessor’s actions, or to praise when he is actually riding the successes put in motion by the previous guy.

Whoever you voted for, Obama is to be our new president and he needs our support as a nation.  We need to give him time to turn things around.  We need to realize that things may very well get worse before they get better and it may not be Obama’s fault.  I am more conservative than Obama, and I woud be saying the same thing if McCain had won.  I believe that any new president is going to have a tough row to hoe for the next few years.

For better or worse, Barack Obama is the new leader of our great nation.  Let’s give him a chance.