Give credit where credit is due

Everyday we hear about another financial institution biting the dust. It's sad to see these big institutions go down and even sadder seeing all these people lose their jobs. What I can't understand is how people didn't see this coming.

Americans, in large numbers, have been living above their means for a long time. I myself have been guilty of doing this. While the trend may have started with wanting to have a cell phone, then the latest cell phone, it all to quickly became a pattern. A computer, then the latest and greatest computer, the habit soon turned into a hard addiction. DVD players, Flat panel TVs, led the way to new cars and then the addict took the biggest hit of all, they bought a house they couldn't afford.

We as a nation are obsessed with stuff. We have to have it and we have to have it now. While I hold the consumer responsible for the problem they placed themselves in, I also blame the financial institutions. They had to know. They had to see the amount of debt people were carrying but they kept on approving loans that would place people further in debt. Worse, bigger institutions gobbled up these bad loans to sure up their financial assets.

I liken the whole thing to a financial game of 'hot potato' but it was worse than that because they were playing with multiple potatoes. In other words they created or allowed so many problems that everyone playing had to know they would get caught, yet they played on.

So when will it end. Americans still want their stuff and the global economy depends on that to a degree. RVs, boats, jet ski's, motorcycles are not considered the property of the well off anymore. A vacation every year and a big Christmas are expected these days. Yet we clearly can't afford them. Hell, a lot of people can't afford the vacations they took last year and haven't paid for yet.

What scares me the most is that these financial institutions gambled people's saving, people's retirement money, MY RETIREMENT MONEY on something they had to know, or should have known, was a loser of a deal from the start.

Yes, they will pay. Many will lose their jobs and some (few) may go to jail but what about the people who trusted them to invest their money? What happens to the guy who saved his money, bought a house he could afford and took vacations only when he had the money to pay for them? The guy that got laughed at for not having a computer at all and carried a four year old cell phone on his hip. He will lose as well. Through no fault of his own he may owe more on his house than it's worth. His retirement fund may be wiped out. Sad.

People better change their ways now. The government has stepped into help but I wouldn't count on that for long. They are taking money from people who didn't over spend to help those who did. That can not go on for long. It's like giving yourself a transfusion with your own blood.

Credit can be dangerous thing. Especially when you give too much of it to people who aren't looking out for your best interest.