Mountains of Debt? Ignorance is Bliss.


There’s an interesting Newsweek article on MSNBC.com about the growing debt problem in the USA. In 1952 the average debt to income ratio was under 40%. Now its 126%. In BC we spend an average of $1.07 for every dollar earned.

So is this really a problem?

I don’t know because I have discovered the power of ignorance. Though I am occasionally bothered by doubts, I am embracing my inner ignoramus and plowing head-first into the future. What’s my secret? I have fashioned a sturdy hat out of these shoe boxes.

I highly recommend it.

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Anonymous
Anonymous
14 years ago

Maybe they can't afford the cable bill to watch those educational franklin mint commercials?

WoodenHorse
WoodenHorse
14 years ago

Jesus….even at the end of a Franklin Mint plate commerial they tell the viewer "Past growth may not represent future growth", yet it would seem that every homeowner in the lower mainland fails to appreciate that fact.

the pope
the pope
14 years ago

Things sure would be a whole lot easier if the future always acted exactly like the past.

WoodenHorse
WoodenHorse
14 years ago

Anonymous said… Lets be fair though, there are different kinds of debt. Going out and racking up your credit cards to buy clothes is different than investing in real-estate.I agree….very different.Anonymous said… How many clothes do you own that have increased in value by 20 percent a year?The most important word in this statement is "have". What…and please let me know…does "have" have to do with "will".

Anonymous
Anonymous
14 years ago

Lets be fair though, there are different kinds of debt. Going out and racking up your credit cards to buy clothes is different than investing in real-estate.How many clothes do you own that have increased in value by 20 percent a year?

cashoutnow
cashoutnow
14 years ago

Stan-good analogy, this chalkboard is getting pretty dirty.

Stan
Stan
14 years ago

cashoutnow,I am not a financial expert, but I believe that when the "average" buyer is unable to buy anymore, they repossess all the properties and start the whole thing again.Its a bit like the chalkboard in school, when you have taught everyone the lesson you clean it off ready for the next class.

cashoutnow
cashoutnow
14 years ago

Stan-Either I know some of the same people that you know, or there are a frightening number of them out there. I know at least four people that bought this summer before they were 'priced out' of the market. I like some of these people quite a lot and wish them no harm, but it takes a special type of ignorance to think that a market can sustain prices that the 'average' buyer can not afford.Who buys then?

david
david
14 years ago

Personally, I believe that rich people, foreign or not, have become rich because they were endowed with just enough business acumen to "know" how much such things "should" cost.Clearly then, what we need are rich ignorant foreigners.. or perhaps they all intend to sell to members of the rock band foreigner?

Stan
Stan
14 years ago

To be honest, all the people I know who have bought a house cannot afford it. They are by my estimate spending more than the 1.07% of income that you suggest (which would mean that some miserly bast@&)$ are not spending their fare share), they are slowly sinking deeper into debt as they fit their laminate flooring and await for that magical payday when they cash out in the fall of '09.Seriously the number of people I know that have this plan is frightening, but when you ask them who will sweep in and buy up their already hideously inflated 30 yr old house for a 1/4 mill more… they tap their nose and reply "rich foreigners, they don't care how much it costs".Personally, I believe that rich people, foreign or not, have become rich because they were endowed with… Read more »