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View Diary: Republicans have no clue how people manage their budgets, Part II (94 comments)

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  •  Everyone would be better off with out debt (4+ / 0-)
    Recommended by:
    Odysseus, MPociask, davelf2, Noodles

    But there is a difference in what kind of debt people have.  The worst kind is credit card debt, then new car loan debt followed by private education loan debt.

    If you avoid those three kinds of debt your family, you, and the nation will be better off.  

    Credit Card debt is bad because of the high interest on it and the habit of spending more than you earn.  Worse when you are using the card to pay for food, dinner, gas, an other short term things.  Unless you are going to cut future spending by that amount, spending today on credit makes no sense.

    New car loan debt is bad because as soon as you drive off the lot you're underwater on the loan  But if you buy a newer model used car you can show value for the money you borrowed.

    Private education debt can't be discharged, has high interest rates, and says you were spending too much for an education.

    Our nation would be better off if it only borrowed for things that will last, highways, schools, etc.  Not to cover pay checks, studies on X or Y or hand outs to those in need.  Those things should be paid for up front.  Any borrowing should also have a plan to pay it off.  (one of the big differences between the Fed Gov and a Family)

    Sure spending from your savings when times get ruff makes sense, putting it all on the credit card is dumb.  We keep hearing the gov needs to spend more now because the economy is weak, but never hear a plan to pay for this borrowing.  Just that when things get better we pay it off and cut spending...which neither party has ever done. (no not even Clinton.)

    Stupid question hour starts now and ends in five minutes.

    by DrillSgtK on Thu Mar 21, 2013 at 09:30:38 AM PDT

    •  Some spending pays for itself. (11+ / 0-)
      We keep hearing the gov needs to spend more now because the economy is weak, but never hear a plan to pay for this borrowing.
      What is the rate of return on reducing energy bills by installing better insulation?  If that rate is higher than the Treasury Bond rate, we should be doing it.

      I see very little evidence that the national fiscal debate is truly concerned with actual finance.  It's a lot of Red Team/Blue Team bullshit.

      The single largest component of ARRA was tax cuts.  Not spending.  Doing nothing new whatsoever, just keep doing what you were doing.  No vision, no proposal, no process.

      -7.75 -4.67

      "Freedom's just another word for nothing left to lose."

      There are no Christians in foxholes.

      by Odysseus on Thu Mar 21, 2013 at 09:50:30 AM PDT

      [ Parent ]

      •  I think the story on that... (2+ / 0-)
        Recommended by:
        sethtriggs, catwho

        (talking about ARRA) is that the President really wanted to do a moonshot type program - a clean energy grid, for example.  But then his advisers came back and said it'd be very difficult and wouldn't put money into the economy right away - like a tax cut would, for example.  And that was that.  

        The other thing going on was that the administration SEVERELY miscalculated the length and depth of the recession (they get a little forgiveness, because at the time there weren't good numbers on how much the economy had shrunk; not total forgiveness, though, because even at the time ARRA was criticized for being too small to fully stimulate the economy).  So, doing a clean energy grid as a long term project didn't make sense, when they thought we just needed a one year, short term bump to the economy.  

      •  Yup... (11+ / 0-)

        America, as a nation, can borrow money at LESS than inflation.  We should be building high speed rail, high speed internet, building schools, repairing roads and bridges and investing in sustainable energy and education.  Big time.  Instead, we insist upon stuffing the fattest pig with seed corn in a wishful attempt that it will poop jobs.

        'Guns don't kill people, video games do - paraphrased from Lamar Alexander (Sen-R-TN)'

        by RichM on Thu Mar 21, 2013 at 10:52:12 AM PDT

        [ Parent ]

    •  Some of us don't have a choice (10+ / 0-)

      I ran up a credit card because I couldn't make ends meet without it. Luckily I didn't have that much to run it up. I also didn't have a choice on getting student loans. The cost of tuition has skyrocketed so much that I had no choice.

      Telling people to be frugal isn't going to solve these problems. That's exactly the problem with what the government is trying to do.

      •  Student loans specifically (11+ / 0-)

        It's a common sentiment whenever you talk about student loan debt to hear people say, "Back in my day, I worked part time and in the summers and paid for college myself!"  Well, good for you.  Since you went to school decades ago, though, tuition has FAR outpaced inflation. So, even though I ALSO worked part time through school and in the summer, I couldn't possibly afford the cost of tuition.  And that was just for undergrad!  Forget law school, when a) you're not supposed to work part time on the side, because you have no time for it, and b) it costs EVEN MORE.

        •  The worst of it is that the politicians (3+ / 0-)
          Recommended by:
          MPociask, peptabysmal, orlbucfan

          who are cutting funding to public universities went to school when it was either free or heavily subsidized. I can't tell you how much some of these people piss me off. We have a funding problem with schools, that's why tuition is so high. Well, that and the fact that they've added a whole new class of corporate style administrators so they can be "competitive" in the "market". Ugh. If I had started school when I graduated my student loans would be abut 3 times what they are now. It's absurd.

        •  Ugh.... (3+ / 0-)
          Recommended by:
          MPociask, AoT, howarddream

          for years I heard this from my dad: "Don't get student loans...I don't want you to have to pay them off for years like I did!"

          Thing is, students loans can be an excellent investment depending on what you plan to do.

          In my case, I didn't take a dime in student loan money (that was over 20 years ago, when I got scholarships, lived at home, and worked through an in-state school that cost about $4K in tuition) for my undergrad.  I took it all for grad work (both MA and JD), but I knew I could afford it, even working as a government attorney.  Graduated from law school a little over ten years ago, and again, did the same thing as undergrad: got scholarships, went in-state for best possible deal I could, and worked.  But I also took the loans.

          Frankly? I'm not sure students can do that as much anymore, as the costs have gone nutty.  I'm scared to death about my 1 year old's college costs 17 years for now...I'm praying she'll want to go to a good state school like I did, and her mother did.

          Cake or DEATH? Oh, I'll have cake, please.

          by wmtriallawyer on Thu Mar 21, 2013 at 11:13:20 AM PDT

          [ Parent ]

      •  ever try doing without unecessary things (0+ / 0-)

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