As Brandon and I sat in the adult session of Stake Conference Saturday evening we listened to our Stake President speak passionately about the need to free ourselves of debt. It will be "crucial," he said. I had to think about that, write it in my notes, circle it and star it. "Ask yourselves if you need it. If the answer is 'yes' then ask yourselves if you need it now." Another entry into my notes, underline, underline. He then proceeded to show a Saturday Night Live clip about debt starring Steve Martin. When was the last time Brother Martin preached at your Stake Conference?! Brilliant.
A few days prior Brandon and I had listened to an episode of "This American Life" on our journey home from Spring Break. It was entitled "Bad Bank." Fifty minutes of Alex Bloomberg and NPR's Adam Davidson explaining today's Banking crisis in layman's terms. Brandon fell asleep a quarter of the way in as this obviously wasn't news to him. It was, although, news to me. Terrifying news. End of the world, how are we ever going to get ourselves out of this news. As I began to understand the global banking crisis more fully my head began to spin and my breathing became shallow . . . much the same way I felt sitting in math class growing up.
The Global Banking crisis is one of those story problems that's impossible to solve. The harder you work on it the more you feel your brain melting. Federal Reserve Chairman, Ben Bernanke: "If we let the banking system fail, no one will talk about the Great Depression anymore because this will be so much worse."
We want so badly to blame the banks for getting us into this mess. Placing the blame elsewhere is always so comforting. Professor David Beim suggests that the problem isn't the banking system, but us. Household debt (cars, credit cards, mortgages) compared to the GDP (the nation's economic output) has historically been between 30 - 50%. Between the years 2000 and 2008 household debt rose dramatically. Our standard of living was going up and we were borrowing to make it happen. Our household debt to GDP ratio now? 100%. That's right. We have incurred 13 trillion dollars worth of household debt.
We've seen that ratio one other time in history.
1929.
(The Great Depression, for those of you who aren't savvy on your History.)
4 comments:
"If ye are prepared, ye shall not fear." Apparently there's a lot of fear right now. Thanks for the timely message & the reminder to always be prepared.
No surprise that Church leaders have seen this coming from afar and have been warning all of us for years. I've been hearing this message since I joined the church 7years ago. I just don't see that many people paid attention to their message, which is a sad commentary on us Saints and the U.S. in general.--timo
Honestly this terrifies me more than anything. Debt is scary and the worse part about it is that some of it is necessary. Sometimes it feels like it is impossible and then despair kicks in. I think the only way that anyone can get through the scariness is to focus on the righteous things we have been taught over and over again and head the words of the Brethren. In church on Sunday a woman gave a prayer that asked for help for all us to live prudently and to curb the desires that may not be a necessity in our lives. At the time it made me chuckle, but the more and more I think about it, the more and more I realize that it taught me that we can ask for help. The Lord has been urging us for years that we need to be aware and frugal. He can help us curb some of those desires if we are willing to ask.
Scary, huh. I am like you in the sense that it is not "new news" to Derick either. But I feel so naive to it all and quite frankly if I could get away with just knowing what I "need" to know I would feel much better... Isn't there a saying like "innocence is a virtue"?
On this topic at least I am innocent.
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