Monday, April 20, 2009

It's All About The Debt!

Well, here I am. I have lots of friends who are bloggers, and I read lots of blogs, so I've decided to start my own. Welcome to the Inaugural Posting of The Freedom Trombone! Why did I choose that name? Well, because I'm a) a trombonist and b) a patriotic American. Plus, I just like the sound of it.

What will I blog about? Anything! As a musician, former educator, avid film fan, outdoorsy, sports-loving, politically observant, Christian, American male, I expect I'll find all sorts of things to write about. Today, I'm going to write about debt.

I used to be in debt. Not for "good" reasons either. I didn't take student loans to get through college or graduate school, didn't buy a house, did buy a car, and just generally made some dumb money decisions. But not anymore! I got a sizeable promotion at work a few months ago, and used the occasion to really begin tackling my debt problem. I paid off the car, the credit cards, and whatever other financial obligations I had, and now I owe nothing but recurring utility bills. Hats off to The Total Money Makeover by Dave Ramsey; if you're having trouble with money I highly recommend it. It is amazing how much more financial freedom one has when there is no debt. I have so much more flexibility to donate to my church and charitable causes (I especially like donating to Leukemia and Lymphoma Research, Juvenile Diabetes Research, and to friends of mine who are taking mission trips.) I can also contribute to my Roth IRA and start saving up for that house, whenever I decide to buy one.

I mention this because I know what it feels like to be a prisoner of debt. Wait...maybe a better term would be slave of debt. When you're in debt, all the money you make really belongs to someone else. I still feel anger over how I've spent years paying off some bank when I could have been investing that money in my future, or at least a new Shires trombone. Also, I'm angered that as a taxpayer, I'm responsible for helping pay off our national debt. That's right...our country is not financially solvent at the moment. It hasn't been for years, but in the current financial crisis people are more cognizant of the debt. Not only do we find ourselves encouraged to be in debt--that's what you're doing every time you take a loan or use a credit card--but our government can not stop spending money it doesn't we don't have. Because the government gets its money from us. The Congressional Budget Office has estimated that within ten years, at our current rate of spending, we'll be paying billions of dollars a year just to pay the interest on our national debt. Essentially, we'll be so far under that we will never pay it off. Not unless our spending habits change. That's something that the commentators at MSNBC and CNN missed last week while they were making dirty jokes and rude comments about people who attended the Tax Day Tea Party protests: it wasn't about current tax rates, it was about the ridiculous amount of spending on bailouts and social programs, spending that only increases our debt problem. Then again, the lack of contrast between professional journalists and Comedy Central is a topic suitable for its own blog post.

Now, a big part of the future tax plan of America is the notion that 95% of the public won't pay income tax. Only those who make $250,000 or more will pay taxes. What is conveniently left out of this proposal is that the death tax will increase, the capital gains tax is going to skyrocket, and cap and trade taxes will be imposed on businesses that don't use "green" energy. (NOTE: that means virtually every business that relies on grid electricity and trucking to do business...which means just about every industry in America will have to pay much higher energy rates, which means they'll pass those expenses onto the consumer...YOU.) The cost of investing, doing business, shipping goods, receiving goods, and inheriting your grandpa's farm is going to increase exponentially, and that isn't including the fact that every business owner and executive who makes more than a quarter of a million dollars will have to raise prices or fire employees (hello, higher unemployment!) in order to maintain their profit margins. (Because businesses must make a profit...otherwise, the business owner finds something else to do.) "BUT WAIT!" you say. "PEOPLE WHO MAKE THAT MUCH MONEY CAN AFFORD IT!"

You think so?

Let's go back to how I started this column. I didn't live in a cardboard box. I wasn't starving. I had a car, and a job. But that didn't change the fact that I was broke. I was able to get by, but in terms of being able to control my financial situation, I effectively had nothing. Consider that many of those high-earning business executives, lawyers, and doctors had to go to school, and they may still be taking years to pay of thousands of dollars in student loans. Maybe they bought a huge new house, they're paying for expensive schools and tutors for the kids, they just got a new Jaguar, they're keeping a stylish wardrobe. In short, they're spending way more than they have. And now, they're responsible for paying for everything that Washington, D.C. decides to throw money at. Do you see the problem? Many wealthy people "look" wealthy, but they often have the same financial issues that I did, just on a bigger scale.

So, if you're reading this, learn to live within your means. (Again, read the works of Dave Ramsey; he has great ideas for getting rid of debt in common-sense, ethical ways.) Don't expect the "rich" to pick up your tab. And don't expect people in Washington to be wiser with your money than you are.

Thanks for reading!

1 comment:

  1. Blogging? You too? Feel free to wander on over and read mine too. I promise no rhyme or reason or much of anything useful. =)

    Lucky you with no student loans. My goal is to save up and try to pay them back in as close to one huge chunk as I can manage when they're due.