The Best Way to Spend the Bailout Money

• Report this Comment On December 04, 2008, at 5:05 PM, MyPiggyBank888 wrote:

  I like the Fools, but this article comes when the bailout money isn't helping what already is planned to be the longest recession to date. Educate? What lead to high debt is individual that weren't managing their personal excess and have become CEO to misspend their companies finances to excesses in the name of globalization. They leveraged, we leveraged, and the fulcrum split in half. I have known and read about people with 5 th grade education that have done alot better than this group. Folks, go back to the basics, invest in the Fools, and the sun will rise!

• Report this Comment On December 04, 2008, at 7:28 PM, jmartin1556 wrote:

  While it is disappointing to read about the lack of financial savvy by our high school kids, I fear that we have been using our charge cards too often for too long. It is instinctive for us to think of our debt obligations whether charge cards, auto loans, or mortgages, in terms of, “How much will it cost me per month.” Auto salesman frequently express a vehicle’s “price” in terms of how much it will cost you per month. Naturally this obscures the real cost of both the vehicle and the borrowing cost.

  Lessons are often best learned by personal experience. As the Bailout article says, “Bad businesses will eventually fail, no matter how much government money they receive”, so it is with reckless spending/borrowing by individuals. Failure may be the best teacher.

  The retail sector reported that seasonal spending by consumers this year was better than predicted – Actually on a par with last year. So you have to wonder: Consumers know that our economy is in a downturn. We know that our investments took a big hit this year, that our jobs are less secure and that a wave of inflation could follow the present deflationary economy. We know this, yet we are out spending as if our economy is unchanged from last year. I think spending makes us feel good and our financial institutions empower us to spend money that we don’t have.

  While educated and financially aware myself, I’m not immune to excessive consumerism – not by a long shot! Such spending has become a vital component of our economy. It may take actual financial “hard times” for me to actually “get it.”

• Report this Comment On December 04, 2008, at 7:34 PM, pmbarrett wrote:

  Please don't ask that more tax money go to our government schools to teach basic economics. Most of the teachers at our government schools don't have a basic understanding of economics, they are mostly political pawns. We must understand, that a stupid populous is what our government "leaders" want, it gives them the power to govern without our interference. That is why economics and civics are no longer taught in school. The old saying about..."We have met the enemy and the enemy is us" should be updated to "We have met the enemy and the enemy is government". As long as we keep electing ignorant legislators, we will continue to be a dumbed down nation.

• Report this Comment On December 04, 2008, at 9:05 PM, opinioned wrote:

  The right to obtain wealth includes the responsibility of managing it and the risk of losing it. When any government intervenes it always does so for its own prejudicial and political reasons. The only honest result occurs when the market place does its job by sorting the winners from the losers. What should have been a short recession with the major financial institutions that originated, partitioned, and sold defective financial instruments over and over again, going bust as they earned the right to go bust when they took unwarranted risk, has instead morphed into governments all over the world trying to salvage their favorite parties at the expense of those not so well "connected," thereby dragging everyone down at the same time. Those who did not become involved in the first place, absent other problems, will probably at least survive, if not prosper. The rest won't.

• Report this Comment On December 04, 2008, at 10:31 PM, steveherb wrote:

  This article wants to pass blame on the borrower. When the truth is the borrower was placing faith in the lender. The average so called uneducated does and would in fact ask the negative side to the loans. Yet they are challenged by those set driven with profit, lenders and realtors. The ones that state they have twenty years in the business so they know what they're talking about. It was strickly the manipulation practices into profiting a commision. No one chose to sign up for this by lack of education. They were just convinced otherwise by so called professionals. You can't tell me your up to date on every law and every code in every field and to say you know the business on how they all work. It's trust. And that's all any financial borrower is guilty of. Lenders state it's a rollercoaster ride and it all balances out over time. But when that time comes and payment is due . Your grievance has been sold off to another lender. For realtors it's anything to make a sale. A sale turns from lies to white lies. Your grievance turns to arbitratration and arbitration turns to sue me, but that turns into realestate lawyer $5,000 minimum. The problem will never be resolved with education or stricter lending practices put forth on the borrower. The problem can only be resolved by an extreme study performed on the lending and realestate fields to insure no manipulations or white lies or any misunderstandings take place upon purchase. Protect the consumer.

  The biggest problem is no has the guts to point the problem out. Twenty years experience and you couldn't inform the client the down side to the loan? Wake up.

• Report this Comment On December 06, 2008, at 9:22 AM, chiponthecape wrote:

  Re: pmbarret's comment on 12/4. Are we twins, separated at birth? I have complained for years, no, decades (yikes!), that passing a basic financial education course should be a requirement for a high school diploma. And, just as pm wrote, I felt that would be impossible, given the nature of the faculty. However I always referred to them as sheep. As far as a civics course goes, it should be simple - read two books - "Parliament of Whores", by PJ O'Rourke, and "The Tax Racket" by Martin Gross. Armed with the knowledge gleaned from these two texts, our young graduates would have an excellent perspective on our government in action.

  I've also used Pogo's famous quote "We have met the enemy, and it is us.", more times than I could count (usually after watching some political commentary on the news). Obviously Walt Kelley's humor went way, way over the heads of his audience.

• Report this Comment On December 12, 2008, at 9:53 PM, fyibri wrote:

  It's not ignorance that got us into this mess, It's the brokers and the banks preying on people's ignorance that got us into this mess. I'm all for mandatory financial education in public schools, but how about mandatory ethics education to get a broker's or banker's license?

• Report this Comment On December 12, 2008, at 10:39 PM, BlueLakeVentures wrote:

  Bailing out the auot industry is not one of them.

  http://bluelakeventures.blogspot.com/2008_11_01_archive.html

• Report this Comment On December 12, 2008, at 11:53 PM, 4bits wrote:

  Better think carefully about who will be repairing our "automatically"outdated vehicles when the Big Three fail-if the vehicle owners want to keep their current cars to save money,guess what-when these companies go boom,u won't be able to find parts too easily,and they won't be cheap.And the money gets drained to the foreign companies,who will make darn sure you'll need to buy THEIRS instead.I know these companies did their best to crack our piggy banks,but we bought and bought without thinking about oil consumption ,the environment,our kids college or affording healthcare.And no one complained until now.So,instead of pulling the stick shift out of their eyes,pull the axle out of our own.

  Give the AMERICAN companies a hand(Which is meager compared to the defense budget),stop spending,start saving and investing,and vote to make education of all us dopes a priority!

• Report this Comment On December 13, 2008, at 2:21 AM, PoliticalStray wrote:

  Hm. Educating our children about finances…something we used to get taught at home..okay. I'll buy that. As long as you include:

  How Not to:

  succumb to your own greed.

  trust others with their own greed.

  beat a free horse to death.

  kill your golden goose.

  How to decipher documents laden with jargon, abbreviations and pointers to other obscure documents – minimum passing: comprehension of 30 pages in a single afternoon while negotiating with broker and your mate.:

  And

  When looking for that which jeopardizes your finances, check first those paid to look after you...like Congress.

  Take nothing for granted. Such as lenders lending money only if they have a good chance of getting it back.

  Fine name and sterling reputation is irrelevant when it comes to profit. Especially, easy profit.

  Finally,

  A successful business, is not by nature incompatible with common sense or morality.

• Report this Comment On December 13, 2008, at 4:12 PM, MisTJoy wrote:

  First let's clarify that Realtors do follow a code of ethics. All real estate agents are not Realtors. We work with family and friends to set reasonable goals. We cautioned our clients not to fall for the shady mortgages offered through the Internet and mail.

  More importantly, the loan "docs" should be prepared and reviewed 30 days before closing so there are no surprises at the signing and time to shop LOCALLY for a better loan as we encouraged our clients to do.

  Many people are in trouble as the economy crashes who would otherwise be able to pay their mortgage, some of whom faithfully paid extra against their mortgage believing that was the best way to save for the future. You know mortgage interest is "front loaded" but do you know the actual % rate is 580% the 1st year?

  So now let's divide $700,000,000,000 by the number

  of heads of households in the U.S. How much is that per family? Let's give them the bailout money so they can pay off their mortgages and end the financial crisis. ;-) Have a great day!

• Report this Comment On December 13, 2008, at 6:02 PM, treeman102 wrote:

  educate the masses? Give me a brake. We need to educate the legeslators so they would know when they were being hood-wenked by the auto manu.'s lobyests. Oh! And the UAW.

  treeman

• Report this Comment On December 14, 2008, at 9:49 PM, zardozjim wrote:

  avoiding economic crises with education? what a crock of myopic utopianism. put 100 "economists" together and you've got 100 theories. we can't even settle on a working definition of science in this country.

Add your comment.