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Debt Discussions about debt and how to deal with debt.

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Old 06-08-2011, 06:29 PM
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DavidBibby DavidBibby is offline
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Default What's your view on Debt?

First off let me say that I am NOT an economist. I know nothing about MACRO economics and I certainly wouldn't want to be put in the position that the US government is in right now. The decision to raise (or not raise) the debt ceiling is by and large a very complicated issue.

Ultimately...the government leaders are elected by the people...and the people are well...spoiled.

The government's view on debt is very closely linked to it's CITIZENS view on debt. This isn't good news folks...because the American debt load is crushing us everyday.

So how do American's view debt? Here's just a few of the pervading thought patterns:

1) I can't live without credit! - I have lots of debt...but I don't see how I could have made it this far without it. If an offer to extend my credit line came my way...I'd gladly take it!

2) It's a tool to use - I pay my credit cards off in full every money. I enjoy all the rewards, miles, etc. you name it. It's like having free money!

3) It's a necessary evil - I absolutely hate paying interest. Unfortunately I have to get and maintain a high credit score just to qualify for a mortgage someday. If I could get rid of all these cards I would... but I can't.

4) It should be avoided at all costs - I don't care what my credit score is and any debt that I did have is now gone or soon will be. I only pay cash for things I need and I save for the things I want. Getting credit is nothing more than allowing a company to take away a part of my wealth production, SHAME on them for taking advantage of so many people!

So... what is your view on debt? Do you want to get rid of it or is it something that you think you have handled for now? How about credit cards? Do you like them, want to keep using them? Do you have them maxed out?

Lets get a good discussion going!

Last edited by DavidBibby; 06-08-2011 at 07:42 PM.
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Old 06-08-2011, 08:02 PM
FinancialGuy FinancialGuy is offline
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Default Re: What's your view on Debt?

Well if it wasn't for debt I would've never gotten through college, or my first car.
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Old 06-09-2011, 11:18 AM
littleroc02us littleroc02us is offline
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Default Re: What's your view on Debt?

Honestly, my view is very unpoplular at it's roots, because I believe that like you said David we are all spoiled and have sacrificed little in this Socialistic society. My political views are very similar to the Tea Party idealogies not the idiots who are currently representing the party. They believe in the following principles according to their website:

1. Fiscal Responsibility
2. Constitutionally limited Gov't
3. Free Markets

Having said that I believe that the American people will never elect the correct guy to eliminate the deficit and to fix the economy because it would hurt them to much and they don't want to make sacrifices in their own lives. Selfishness yes, we are all selfish. I mean would you want Social security reduced or eliminated or financial support for the local state university cut or elimanted? Majority will say no, so IMO the problem cannot be solved because if you look at the federal and state budgets most of their revenue goes towards social programs, federal and state organiziations like schools, police, offices, etc.... The problem is that the gov't thinks that by cutting miniscule programs and raising taxes that it will fix the problem, it never will because it isn't enough. I believe that the only way the gov't could ever live within it's means is to start cutting Social security, Medicare and the Military costs. Mark my words that will never happen, our country is to reliant on Big Gov't they just don't want to admit it. Personally I would be willing to opt out of Social security and Medicare and use that money to invest and save for retirement using index funds and mutual funds.
As for limited gov't, the government was never suppose to be this large according to the constitution it was formed as a republic, where the people were represented for their beliefs, to serve the people. There's no serving going on, it's special interest groups and large corporations who are given bailouts and support for making products that no one wants and can afford. The gov't is suppose to protect the constitution and the bill of Rights. The gov't should stay out of my household and let me be the parent to my kids that they make the right choices. In this country Big Gov't is trying to take my parenting rights away, by telling me they won't continue to serve chocolate milk in school because of obesity or that there should be extra taxes for those who tan or drink pop.

As for Free market, the gov't needs to keep their slimy hands out of this. Let the market work as it should. If Chrysler isn't making enough to stay in business because nobody's buying their cars and they have mismanaged their business let them fail. Banks shouldn't be bailed out either. Let them fail. My bank is doing fine because it keeps 12% liquidity in reserves and had no problems during the recession. Businesses should fail and succeed, that is how the free market works. Quit putting bandages on everything. The obama administration had this program called "Home affordibility" where they would work to make your payments better, but did they realize that 90% of the applications would be rejected and some of them that were accepted were for people who still couldn't afford to make their payment. Another worthless gov't program.
Higher taxes doesn't solve anything either, try working with what you have already and only spend that Gov't? The rich already pay higher Federal and State income taxes here in Minnesota then the poor and middle class, they also don't receive some of the tax benifits that the middle class and poor recieve so that doesn't work. I believe the regressive sales tax plan is fine and the progressive tax is working well for income, so just work with what you have because collecting more won't solve anything. Come on
Washington think!
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Old 06-09-2011, 11:19 AM
littleroc02us littleroc02us is offline
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Default Re: What's your view on Debt?

Originally Posted by FinancialGuy View Post
Well if it wasn't for debt I would've never gotten through college, or my first car.
You could have worked during college to pay for some of it. And a car, all you need is 3k for a used car and that can be saved up for to pay in cash.
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Old 06-16-2011, 08:44 AM
dalemdunn dalemdunn is offline
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Default Re: What's your view on Debt?

Debt is fine if managed well. Debt is a headache to anyone who has it if it was acquired for nothing sensible -- 'just because'
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Old 06-17-2011, 08:05 AM
lerrygibson lerrygibson is offline
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Default Re: What's your view on Debt?

It is our responsibility to manage our debts well and moreover it thus necessary to manage our expenses and it thus needs to be done properly so that later it will turn out to be very successful.
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Old 08-09-2011, 12:43 AM
Fredy Atwater Fredy Atwater is offline
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Default Re: What's your view on Debt?

I am in favor of using debt as a temporary means to finance an investment I know we can afford to pay off quickly. Otherwise,I am against it. I do not recommend credit cards to my sons. However,when the times comes I would encourage them to buy a home using credit. I would not encourage anyone to invest in the market with borrowed money.

I think David brought up an excellent question to this podium.

I use a credit card to make pre planned purchases I know my wife and I had agreed to make and I know we can pay off in full with our savings.

However,there comes a time we have to think about saving our own money and pay for everything with cash, if not we are bound to be poor. We should live under our means. We have to buy under our means. Going above our spending limits is the basis for the credit industry being rich. They lend us the money .

I think one can make money with smart debt , like real estate. My wife and I made a lot of money in the real estate bubble. But we were never out of debt.

That's the big question. Today we live much better after we relocated from NY to Charlotte, simply by living under our means and paying off our debt as quickly as possible.
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Old 08-09-2011, 07:34 AM
Choo Yang Choo Yang is offline
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Default Re: What's your view on Debt?

I believe debt is a double edged sword.

Handled wisely and with discipline it can bring you gains - for instance, when you have a credit card that gives you for example 5% cashback everytime you spend on the card. It would mean that you are saving 5% everytime you use the cash as compared to when you use cash. Also most credit cards has a 1 month period to repay and if that money is in your savings account for the extra month compounded monthly, it would still give you a small amount.

However, if you are careless and do not know how to handle money, it will cause you pain and misery. Once again with the simple example of a credit card, when you are using it and if you do not feel that you are actually spending as compared to when you have cash, you are in a lot of trouble as you are bound to overspend. And the credit card companies are not stupid and would give you a limit slightly more than your wages after tax and basic expense. With such high interest rates, it would definitely dig your financial grave deeper and deeper.
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Old 08-24-2011, 12:18 PM
kate032 kate032 is offline
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Default Re: What's your view on Debt?

Used responsibly, it is a tool to help build wealth. Very few people have money lying around for law school or med school, but loans for this kind of education is usually an investment because the degrees give you a much greater earning power. Same with a house. By the time most people would have the money saved up to buy a house, they'd be at least middle-aged if not elderly.

Debt is like a lot of things in life and can be used as a benefit or abused. When people jump into debt (most often credit cards) and have no idea of the long-term implications, then the debt becomes destructive.

People just aren't very smart sometimes.
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