As the subprime mortgage mess has gone into major meltdown mode, we’re hearing a lot about “predatory lenders” while sympathetic words are being used for the people who are losing their homes.
But at what point do we say, “Wait a second–should these people bear some responsibility for making bad financial choices? Why did they choose a loan that was not good for them? Are they guilty of living beyond their means?”
Ah, living beyond ones means. An American tradition, some would say. Advertisers and credit card companies surely want you to engage in this kind of behavior, and hey, it’s good for the economy, which is good for America, right? Or at least that’s what we tell ourselves when those $230 Cole Haan shoes at Nordstrom are calling our name.
But at what point does it become too much? If I buy the Cole Haan shoes, or use my credit card to pay for groceries or for my kids school uniform, and then I can’t make the payments and my interest rate jumps not only on the credit card I didn’t make the payment on but on ALL my credit cards–is that my fault for not being responsible with my money? Or was I lured by dishonest and seductive promises about easy credit and low APR’s into thinking that I could spend now, pay later?
And if, as in the case of the subprime debacle, the government intervenes, what message will it send to people? Will it help us become smarter spenders and borrowers, or teach us that we can engage in risky behavior and not bear the consequences?
We’re talking about issues of responsibility with debt today, and how our culture thinks about money and credit. The subprime mess has showed us how far this issue reaches. All sectors are hurt, not just those involved with the industry. Is it time for our country to radically transform the way we think about money, credit, and debt?