The Heterofinancial Assumption

1 10 2008

Yesterday, Jean Chatzky wrote an article attempting to bring the financial crisis into perspective for us Americans who don’t know the difference between CMBS and CNBC:

“If credit dries up and there is no plan, more of your neighbors will lose their homes. Those homes will sit empty because potential buyers will not be able to come up with the financing to take them off the market. Empty homes lower the value of the rest of the houses on the block – i.e. yours and mine. Fewer residents mean the town will have to raise taxes on those who remain – i.e. you and me – to pay for all the services that must continue from garbage pickup to snow removal to the running of the schools. Eventually, those residents – i.e. you and me – will get angry and vote down these seemingly ridiculous school budgets or vote in a new school board with a cost-cutting approach. The next thing you know it: There goes the football team.

Yes, supporting the rescue plan – and I do believe it is a rescue plan – means supporting your neighbors, your schools, your town, your children’s future.”

what… the… f*ck…

First of all, football games? That’s your rational argument for why three quarters of a trillion dollars should go toward something that wasn’t on the financial radar a month ago? Can we say impulse buy?

Let’s talk about what government offices and programs will NOT get money this coming year because, shucks, we blew it on this Rescue plan. Isn’t this money coming out of some previously-allocated budget(s)? What happens to those programs? Which programs are they? I don’t want to trade elementary afterschool care for friday night high school football games.

Secondly, can we say assumption much? Many people DO NOT OWN A HOME. A lot of people rent, and while many are saving money for a home, they are not currently even near considering getting a mortgage. In many cases it’s because houses cost so much in an area that doesn’t have an abundance of high paying jobs. We have to save more longer to even begin to afford it, and so we have been. That includes not having huge credit debt – or none at all.  Some people have been sans-credit card for years now because they didn’t want to accrue debt, and some only keep small balances on credit cards in order to repair less than stellar credit due to indiscretions in their early twenties.

So, this whole “oh no, no credit! no loans! high mortgage rates! oh my!” fear mongering isn’t resonnating with all of us – especially those who are borderline poor anyway. I pay my bills – barely. I have enough money for food and gas and car insurance and cat food – barely. I work full time and have healthcare – in principle anyway. I have savings that I could use, but call me crazy – I’d like to save my savings.

I’m not saying there is no argument here, but I’m not seeing it anywhere. So, can someone frame this argument for the renters of the world? Please?

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2 responses

30 06 2009
sandraraven

Hi! I was surfing and found your blog post… nice! I love your blog. 🙂 Cheers! Sandra. R.

9 09 2009
Sandra R

Hi! I was surfing and found your blog post… nice! I love your blog. 🙂 Cheers! Sandra. R.

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