Tuesday, July 19, 2005

Advice: Reduce your debt

Safe Haven | The Great Debt
I expect that you may be skeptical of this "doomsday scenario", but I assure you, the risks are quite real. In a world of interest-only mortgages, adjustable-rate loans and Wal-Mart Mania, it will not matter if you, personally, do not default on your debts. It will not matter if you, personally, have been fiscally responsible. Just like it only takes one bad driver to cause a 50-car pileup on the highway, the domino effect applies to our economy as well. The government and the vast majority of the United States population have been on a spending binge the likes of which the world has never seen. When the bill comes due, we all will pay. We will pay through higher taxes. We will pay because our neighbors walk away from their mortgages, causing a glut of unwanted real estate on the market leaving us unable to sell our own homes for even close to what we paid for them. We will pay for new social programs to assist the very people who caused this catastrophe when they wind up mired in bankruptcy. We will pay with the blood of our sons and daughters in the wars that always accompany the decline of an empire. We will pay.