Blogger's rant: Why the economic future looks so grim
Posted
Mar 26 2008, 08:01 PM
by
Karen Datko
Rating:
Fed up with the government's bailout du jour? You'll find a kindred spirit in Randall at Credit Withdrawal. He's been on an extended rant lately about the causes of economic gloom and the supposed solutions to fix them. His starship goes where a lot of other personal-finance bloggers hesitate to travel.
Bailout plans provoke this reaction: "Rewarding stupidity isn't going to make anyone learn from their mistakes. America is the land of opportunity, but that opportunity also includes the opportunity to fail."
Why does the government want us to blow our tax rebate money on stuff? He writes: "If everyone were to spend their checks only on debt reduction, the only 'stimulus' that would happen would be for the bankers and lenders, and they already have lots of money coming to them from the Fed in the form of reduced prime rates and now direct loans to nonbanking businesses."
Randall doesn't stop there. He foretells the future -- it ain't pretty -- and proposes what regulars folks should do, just in case his predictions are spot on.
Now is the time to pay off debt, he writes. Why? "I believe the next major bubble to burst is going to be the credit card debt bubble. With the three main squeezes of household money increasing (food, housing and credit bills) the number of people pushed from 'just hanging on' to 'free-falling' is going to rise dramatically," he writes.
Also, create an emergency fund, increase income and adopt a more frugal lifestyle. He adds that "there's no time like the present to get ready for the storm. If we're lucky, it'll be like a short thunderstorm, washing away overpriced houses and imaginary profits from over-inflated businesses, and then back to normal. If not, the more prepared for the long storm, the better."
