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And, yes, I DO take it personally: Pay as you go... Now THERE'S a concept...!
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Tuesday, February 05, 2008

Pay as you go... Now THERE'S a concept...!

[T]he freewheeling days of credit and risk may have run their course — at least for a while and perhaps much longer — as a period of involuntary thrift unfolds in many households. With the number of jobs shrinking, housing prices falling and debt levels swelling, the same nation that pioneered the no-money-down mortgage suddenly confronts an unfamiliar imperative: more Americans must live within their means.

“We don’t use our credit cards anymore,” said Lisa Merhaut, a professional at a telecommunications company who lives in Leesburg, Va., and whose family last year ran up credit card debt it could not handle.

Today, Ms. Merhaut, 44, manages her money the way her father did. Despite a household income reaching six figures, she uses cash for every purchase. “What we have is what we have,” Ms. Merhaut said. “We have to rely on the money that we’re bringing in.”


“The long collapse in the United States savings rate is over,” said Ethan S. Harris, chief United States economist for Lehman Brothers. “People are going to start saving the old-fashioned way, rather than letting the stock market and rising home values do it for them.”

In 1984, Americans were still saving more than one-tenth of their income, according to the government. A decade later, the rate was down by half. Now, the savings rate is slightly negative, suggesting that on average Americans spend more than their disposable income.

buried 27 paragraphs into the article, this fascinating little tidbit is revealed...
The top fifth of American earners generates half of all consumer spending, noted Dean Maki, chief United States economist at Barclays Capital.

what the article fails to note is that high debt is not only an integral part of the u.s. economy, it is also part and parcel of another phenomenon, whether it's a conscious, planned strategy or simply a natural consequence of the debt itself, to keep americans in bondage, chained to their jobs - no matter how awful they may be - spinning down to their graves on a greased slide of monthly payments...

i was part of that vicious cycle myself until about ten years ago... the freedom i now enjoy by being totally debt-free is a freedom that i never imagined could be so sweet... i live a very simple, uncluttered life with no assets to speak of and few headaches... i remember back in the late 80s when i was struggling mightily to break into that top fifth noted above, i had a major realization... all the "stuff" i was laboring to acquire in reality "owned" me, not the other way around... it took another ten years for that lesson to fully sink in to where i had permanently altered my lifestyle... now i wouldn't have it any other way and i think back and wonder what took me so long...

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