I think he is a blessing to our military....and has served this nation well....but your humor of Bush fault for credit card debt etc you make one
Posted on 04/17/2005 6:59:02 PM PDT by A. Pole
The woman interviewed by Frontline, Elizabeth Warren, has written an interesting book, "The Two Income Trap: Why Middle-Class Parents Are Going Broke".
She is a Harvard Professor, and is obviously approaching the subject from the left, but she did have interesting observations.
*She feels that middle class parents value their chilren's education, and will do whatever is necessary to ensure a good education.
*Parents want to live in a good school district. This results in a bidding war, raising the prices, of the houses in the good school districts.
*Families will send the wife into the workforce, to increase the families economic well being, enabling them to afford the mortgages of the price inflated houses in the good school districts.
*Since the majority of middle class families now have two earners, the bidding war on houses in good school districts heats up, further increasing the price of housing. The two earner family doesn't really have an economic advantage anymore, they are on the same level as everyone else.
*With two earners in the workforce, families loose the advantage of having a spouse at home. So other living costs increase: childcare costs, transportation costs, food costs (more convenience foods, eating out).
*Middle class families are stretched so thin financially, that whenever a bump comes along (unemployment, medical problems, etc.) the family is forced into bankruptcy.
Her solutions are:
*Public school vouchers, enabling a family to send their children to any public school of their choice. She feels this will cool down the bidding war of housing prices.
*Increased regulation on credit providers, including better disclosure, and preventing people most likely to default from getting credit and mortgages.
She does not feel that people are running up credit card balances foolishly. She does not follow the Dave Ramsey/Suze Orman/Andrew Tobias/the late Larry Burkett philosophy of paying off credit card balances, and then avoiding using credit cards as much as possible.
I find the idea of public school vouchers interesting.
I don't know how politically Congress could regulate denying credit opportunity to low income people.
So I found it an interesting book. She had some good observations, even if she did come to conclusions that she could not support.
Also, I wanted to point out that credit card bills do print the interest rate being paid, and do show the dollar amount of the last payment that was interest and finance charge. Simple arithmetic will allow anyone to figure out how long it will take to pay off a balance while making minimum payments.
More detailed disclosure, as Ms Warren advocates, would be easy enough for the credit card companies to print on their bills. But I don't think it will have any real effect on the debtor's behavior, as the information is already available.
I have sent a copy of this article to my three kids, aged 22, 20 and 18 so that they can see what types of traps await them in the real world.
I wish you could see the looks on people's faces when they first hear that their measly $12,000 credit card debt will take them 40 years to pay off. It's a mixture of shock and horror.
Nice idea---good to start them young.
My five are middle aged and if they haven't learned it now they never will--LOL.
I've been using credit cards for 30 years and I think maybe only once I didn't pay the balance when I got the bill. I just don't buy anything until I can afford it, the card is just a convenient tool. Many cards reward usage as well.
I agree---they are a necessity when traveling and I've taken a couple of trips by accumulated air miles and I don't travel much.
Everyone needs them today but I have never charged one thing that I didn't have the money to pay for,even trips.It's called discipline.
I think he is a blessing to our military....and has served this nation well....but your humor of Bush fault for credit card debt etc you make one
Perfect example of the law of unintended consequences at work. However, I don't believe that marriage will change the payback schedule established in the 13. But if you're correct, I am going to stop looking for women at AA and start hanging out at the bankruptcy court.
If she had no job, and thus no income at bankruptcy time, then divorces and goes to live with another guy, and still has no job, what happens? I find the question interesting in its possible consequences to marriage
IMHO opinion it will all hinge upon whether the wife was a co-maker of the debt or whether she was just an authorized user. If she is legally liable for the debt and her and hubby both go bankrupt and both agree to a repayment plan for their share of the debt then that plan will follow her after the marriage breaks up. If she defaults, her 13 will be dismissed and she will owe the debts in full as if the 13 never happened.
Way to go!
You completely missed the point of the article.
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