In our economy, credit has become a very dangerous thing. Let me use an analogy to explain.
Morphine when used in small doses has medical value. When used regularly it gets a person high, but it quickly becomes addictive. When used excessively, it will kill you.
Credit is like morphine. It is wonderful if used on a limited basis. If a company can borrow at 6 percent and build a plant that will generate 10 percent revenue, that is not only beneficial to the company’s bottom line, but to the new workers who get jobs and the consumers who use the new product.
Credit becomes addictive and will burden a person who over uses it, runs up his credit cards and can only afford to make the minimum payment.
Credit will kill you financially, if you regularly spend more than you earn, and borrow the difference. Sooner or later it’ll lead to bankruptcy.
Individuals, companies and governments in this country have been using credit excessively, and that is the major reason for this economic crisis.
While President Obama looked great and sounded even better making his speech, his spend, spend, spend, borrow, borrow, borrow proposal is not the solution. President Obama, the solution isn’t for banks to start lending again so Mr. Smith can buy his tenth pair of Gucci sunglasses or Mrs. Jones can buy a vacation house she can’t afford. More lending will be like giving the addict more morphine. Sure it will get him on his feet in the short run, but it will kill him in the long run.
The stock market has fallen 50 percent. The last time it fell that much, it took 10 years to start going up again. We could be entering a long period of rough economic times. Individuals, companies and our local, state and federal governments need to get their financial house in order. Not spend and borrow more!
Instead, President Obama’s message should have been, we all need to start living within ours means, paying down our debt, stopping the tax increases and saving money for a rainy day.
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