Credit Card Spending

Years ago I ran into financial difficulty. I didn't see it coming at all. You see, I thought we were being wise.

My wife and I didn't see credit cards as "cash". We kept one around for emergencies only. We preferred to operate on a cash-only basis. Unfortunately, we didn't think of the future when it came to cash-only. If it was cash, it was expendable. We paid our bills. We bought what we could afford. But we didn't put anything away. And when (not if) those emergency situations arose, we opted to go the credit card route. An unexpected automobile breakdown or a need to repair a water heater and before long you'll find you're much deeper in debt than you realized. Well, in the end my wife left me with the kids (great!) and the debt (sigh). I paid off the debt and raised the kids and it wasn't easy. And I learned a valuable lesson. Cut up the credit cards. Don't live beyond your means ... and that means what might happen as well as what you would like to have.

Now we find the federal government trying to run the same game. Use the available cash for whatever they want to use it for. Use credit for the emergencies. Borrow from 300 billion Americans to rescue Fannie Mae and Freddie Mac and AIG and, well, all those banks with all those other bad debts. It's an emergency! And it may well be, but who is going to pay for this? We're already sporting a debt to which no one can see an end. How is this a good thing?

The market is indicating that this is a good thing, but I'm thinking that nationalizing a major portion of America's debt is not a good move. I'm wondering how much debt has to accrue before we see a problem. I wonder how much it's going to hurt when the payments exceed the capacity. I wonder when this is going to get more expensive than we can afford ... in more ways that one. My suggestion to our government? Bite the bullet, cut up the credit cards, and start living on what you're making.