Forget the personal debt horror stories--most Americans are living within their means.
by John Zogby
www.forbes.com
It's no secret that Americans have become addicted to credit in order to maintain an artificially high standard of living. According to a recent CardTrak.com survey of 55,000 consumers, 13% of Americans have credit card balances of more than $25,000.
Have we lost our way when it comes to credit? Now celebrating my 25th year as a pollster, I've learned to read statistics with a bit of dyslexia, taking a look at them backward and upside down. So I discovered that almost half of that 13% were people who could well afford to carry that much credit card debt--which meant to me that approximately nine in 10 Americans were living within their means with regard to credit card debt. The real truth here is that most Americans are living their lives modestly, but this does not make a dramatic headline.
But Americans have bought into the misconception that most of us are overextended. Taking into account a household's overall financial picture, a Zogby Interactive survey conducted in March 2008 found that 79% of Americans believe they themselves live within their means financially, given their current personal financial situation.
This same survey found that 87% believe that most other Americans are living beyond their financial means. Our more recent polling shows Americans have been trimming their budgets in response to today's financial reality--on entertainment, major purchases, even groceries. The Great Recession has not created a new mindset, because it was already here.
It's not so much that we're a nation of debtors--though there are a lot of us with too much debt--but that we're not a nation of savers. On the surface, it would appear that Americans have an insatiable appetite for things they cannot afford. The Economist reported in 2008 that household and consumer debt was up from 100% of gross domestic product in 1980 to 173% by 2007.
But consider the reality that much new debt has been caused by students who graduate from college with unmanageable credit card payments, and that a substantial burden is being carried by these college graduates well into their thirties. Much of this growing debt is in start-up costs for young people and added penalties and interest rates.
There are many of us working for less, and many who have come to the realization that they cannot achieve the American Dream on a buy-now pay-later basis. The Great Recession is not creating a new trend but rather accelerating one I have noted over the last decade: a move away from easy credit, away from buying what we can't afford, away from seeking out fantasy.
Wednesday, April 1, 2009
Top 10 States in Budget Trouble
Click here for the Top 10 States in Budget Trouble, as reported at Real Clear Politics and cross posted from Obama Alert blog.
Monday, March 30, 2009
Sen. Gregg: Obama's budget plan 'will lead to immense national debt'
Sen. Judd Gregg, once President Barack Obama's choice to be commerce secretary, yesterday said the President's proposed budget "spends too much, taxes too much, and borrows too much."
New Hampshire's senior senator, the ranking Republican on the Senate Budget Committee, delivered the weekly Republican address.
The President focused his weekly address to the nation yesterday on the flooding in the Midwest, laying out the multi-agency federal response to the natural disaster.
He praised the efforts of thousands of volunteers who have pitched in to fill sandbags, build levees and provide other support -- and used their example to renew his call for community service.
"In the face of an incredible challenge, the people of these communities have rallied in support of one another," Obama said. "And their service isn't just inspirational -- it's integral to our response."
Gregg began his six-minute address by acknowledging the "difficult times" and "the efforts being made by our President and his seriousness about addressing these issues."
But, he said, the administration's budget would increase the national debt, taxes and government spending.
In contrast, Gregg said, Republicans "believe you create prosperity by having an affordable government that pursues its responsibilities without excessive costs, taxes or debt, that it is the individual American who creates prosperity and good jobs, not the government."
Gregg also said the Obama administration wants to create what he called "a new national sales tax on everyone's electric bill."
Republicans have criticized the administration's proposal to create a "cap and trade" system, which would require companies to purchase credits for carbon emissions.
The administration proposes using revenues generated from such a system to fund clean energy technology, and pay for a tax credit for Americans who earn less than $250,000 a year, a key campaign pledge for Obama. White House officials have said the "Making Work Pay" tax credit would compensate middle-class Americans for any increased utility costs under such a system, according to published reports.
The White House budget includes funding for that tax credit for 10 years. However, current House and Senate budget proposals cut funding for that tax credit beyond 2010, according to published reports.
Yesterday, Gregg warned that Obama's budget plan "will lead to an immense national debt that not only threatens the value of the dollar and puts at risk our ability to borrow money to run the government," but also places the next generation "at a huge disadvantage as they inherit this debt, which will make their chances of success less than those given to us by our parents."
Near the end of his five-minute address, the President hailed Congress' passage of a bill that promotes national service. "In facing sudden crises or more stubborn challenges, the truth is we are all in this together -- as neighbors and fellow citizens," Obama said.
And he closed by offering thoughts, prayers and "our continued assistance" to those dealing with the flooding.
NOTE: When first posted, this article misidentified the Cabinet post that Judd Gregg turned down.
New Hampshire's senior senator, the ranking Republican on the Senate Budget Committee, delivered the weekly Republican address.
The President focused his weekly address to the nation yesterday on the flooding in the Midwest, laying out the multi-agency federal response to the natural disaster.
He praised the efforts of thousands of volunteers who have pitched in to fill sandbags, build levees and provide other support -- and used their example to renew his call for community service.
"In the face of an incredible challenge, the people of these communities have rallied in support of one another," Obama said. "And their service isn't just inspirational -- it's integral to our response."
Gregg began his six-minute address by acknowledging the "difficult times" and "the efforts being made by our President and his seriousness about addressing these issues."
But, he said, the administration's budget would increase the national debt, taxes and government spending.
In contrast, Gregg said, Republicans "believe you create prosperity by having an affordable government that pursues its responsibilities without excessive costs, taxes or debt, that it is the individual American who creates prosperity and good jobs, not the government."
Gregg also said the Obama administration wants to create what he called "a new national sales tax on everyone's electric bill."
Republicans have criticized the administration's proposal to create a "cap and trade" system, which would require companies to purchase credits for carbon emissions.
The administration proposes using revenues generated from such a system to fund clean energy technology, and pay for a tax credit for Americans who earn less than $250,000 a year, a key campaign pledge for Obama. White House officials have said the "Making Work Pay" tax credit would compensate middle-class Americans for any increased utility costs under such a system, according to published reports.
The White House budget includes funding for that tax credit for 10 years. However, current House and Senate budget proposals cut funding for that tax credit beyond 2010, according to published reports.
Yesterday, Gregg warned that Obama's budget plan "will lead to an immense national debt that not only threatens the value of the dollar and puts at risk our ability to borrow money to run the government," but also places the next generation "at a huge disadvantage as they inherit this debt, which will make their chances of success less than those given to us by our parents."
Near the end of his five-minute address, the President hailed Congress' passage of a bill that promotes national service. "In facing sudden crises or more stubborn challenges, the truth is we are all in this together -- as neighbors and fellow citizens," Obama said.
And he closed by offering thoughts, prayers and "our continued assistance" to those dealing with the flooding.
NOTE: When first posted, this article misidentified the Cabinet post that Judd Gregg turned down.
National debt needs viable solution
Melanie Thomas
www.wilkesbeacon.com
America, let’s be serious.
It’s not the war in Iraq, party discrepancies, or ideology that is our biggest threat.
In recent months the economy has been the sharpest pain that the United States has been enduring. It’s hard to fathom that in order for us to balance our national budget we would need $53 trillion.
The documentary I.O.U.S.A, recently screened on campus, outlined what is contributing to this economic mess. Certainly, there seems to be no easy solution to eliminate the debt.
Annually, the national budget increases by two to three trillion dollars. The U.S. government continues to borrow money from various countries that it will never be able to pay back in order to cover expenses.
But the reality is clear: ultimately the countries we owe debt to may one day have a ruling voice in U.S. policy.
Within less than ten years, an unequal balance between individuals receiving social security and those paying into it will begin. We won’t be able to take care of the people who took care of us.
According to I.O.U.S.A, “In 2008, the United States spent $610 billion on Social Security benefits, $330 billion on Medicare, and $204 billion on Medicaid.”
A step in the right direction for solving the budget deficit would be to tighten up guidelines for those who qualify for Social Security. I believe that Social Security requirements need to be reviewed and revised.
Only people with legitimate health concerns and issues should qualify for benefits.
If we could reform Social Security successfully, our deficit could be reduced by up to $7 trillion.
Another major factor pertaining to the nation’s debt is our inability to save. Many individuals simply do not live within their own means and saving money has become a practice of the past.
Everyone wants to live comfortably and the leaders in this country have a tendency to make us believe that this is realistic.
What they fail to tell us is the truth. We shouldn’t be lied to anymore. Fiscal irresponsibility shouldn’t be allowed.
The country also needs to change its trading habits. This country has a tendency to consume or import more than it produces or exports. Living with excess is not only bad for the economy but causing an even bigger environmental problem.
Everything that affects the economy can be connected to other serious problems that we face. It’s way past time for our country reign things in and not be foolish. One president is not the solution for this disaster. We need so much more reform.
We literally went from a balanced budget with President Clinton to an $8.7 trillion deficit.
As Americans we need to make sure that we are voting for those truly interested in the betterment of this nation and not let those who have been dishonest in the past get their hands on spending our dollars or lie to us about the severity of the problem.
Even if we ended the war in Iraq, earmarks and pork barrel spending were eliminated, and Bush tax cuts were allowed to expire, we would still not be able to solve the national debt.
The mess that America has created will not be solved easily. We must travel a long path filled with bumps and obstacles in order to maintain our status. If our national debt is not addressed in the near future, we will fail as a nation.
www.wilkesbeacon.com
America, let’s be serious.
It’s not the war in Iraq, party discrepancies, or ideology that is our biggest threat.
In recent months the economy has been the sharpest pain that the United States has been enduring. It’s hard to fathom that in order for us to balance our national budget we would need $53 trillion.
The documentary I.O.U.S.A, recently screened on campus, outlined what is contributing to this economic mess. Certainly, there seems to be no easy solution to eliminate the debt.
Annually, the national budget increases by two to three trillion dollars. The U.S. government continues to borrow money from various countries that it will never be able to pay back in order to cover expenses.
But the reality is clear: ultimately the countries we owe debt to may one day have a ruling voice in U.S. policy.
Within less than ten years, an unequal balance between individuals receiving social security and those paying into it will begin. We won’t be able to take care of the people who took care of us.
According to I.O.U.S.A, “In 2008, the United States spent $610 billion on Social Security benefits, $330 billion on Medicare, and $204 billion on Medicaid.”
A step in the right direction for solving the budget deficit would be to tighten up guidelines for those who qualify for Social Security. I believe that Social Security requirements need to be reviewed and revised.
Only people with legitimate health concerns and issues should qualify for benefits.
If we could reform Social Security successfully, our deficit could be reduced by up to $7 trillion.
Another major factor pertaining to the nation’s debt is our inability to save. Many individuals simply do not live within their own means and saving money has become a practice of the past.
Everyone wants to live comfortably and the leaders in this country have a tendency to make us believe that this is realistic.
What they fail to tell us is the truth. We shouldn’t be lied to anymore. Fiscal irresponsibility shouldn’t be allowed.
The country also needs to change its trading habits. This country has a tendency to consume or import more than it produces or exports. Living with excess is not only bad for the economy but causing an even bigger environmental problem.
Everything that affects the economy can be connected to other serious problems that we face. It’s way past time for our country reign things in and not be foolish. One president is not the solution for this disaster. We need so much more reform.
We literally went from a balanced budget with President Clinton to an $8.7 trillion deficit.
As Americans we need to make sure that we are voting for those truly interested in the betterment of this nation and not let those who have been dishonest in the past get their hands on spending our dollars or lie to us about the severity of the problem.
Even if we ended the war in Iraq, earmarks and pork barrel spending were eliminated, and Bush tax cuts were allowed to expire, we would still not be able to solve the national debt.
The mess that America has created will not be solved easily. We must travel a long path filled with bumps and obstacles in order to maintain our status. If our national debt is not addressed in the near future, we will fail as a nation.
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