Friday, August 29, 2008

Personal Responsibility

I’ve noticed, recently, that we’ve become, for the most part, a nation of children and whiners. “The mean old banks are going to foreclose my house! Somebody stop them!” “I can’t afford medical insurance! I want somebody to pay for my medical care for every little sniffle!” “I didn’t save for retirement like my neighbor did, and I have to live on Social Security! Somebody make my neighbor share their money so I can have more!” “I put all of my bills on my credit card, and now they’re charging me 30% interest! On money I used to buy food for my children while I spent my check on myself! Somebody make them be nicer, and forgive my debt!”

By “somebody,” they mean “the government.”

People have forgotten what it was to be responsible for themselves and their own actions. People didn’t used buy a house without at least a twenty percent down payment, or sign their name to a house where the payments were more than they could afford. People used to pay the doctor out of their own pockets, and the doctors didn’t overcharge. People used to save for their own retirement, and didn’t think to do otherwise. And not so long ago, if a family didn’t have the cash to pay for what they wanted, they bought what they needed and did without the rest. People used to live within their means.

What happened? I’m not completely sure, but I think “somebody” intervened to teach people that they didn’t have to be responsible for their own actions.

Let’s look at the mortgage crisis, first. Or maybe the credit crisis, since the two are so closely related.

A while back, we had a low inflation rate of around 1%. Our then federal reserve chairman, Alan Greenspan, cut the federal interest rate to put more easily accessible money out there because he feared that we were beginning to head toward deflation. The interest rate was cut, and cut again, and again, dropping the interest rate on everything from credit cards, to cars, to houses. People started using credit for everything, and applying for more and more types of credit. The average American now has several credit card payments, a couple of car payments, and a house payment.

Many were smart, paying off those loans as soon as they could. Some fell into the belief that if they wanted something, they needed it, and they needed it now, whether they could pay for it now or not. After all, they could always use credit. That wasn't really money, after all, and we were raised in that standard of living. We deserve that house. That car. That vacation. Never mind that we can't pay for it now. The money's there. It just isn't ours, yet.

Some lost sight that, though they were raised in a certain standard of living, their parents worked long and hard to get to that point, and that they lived beneath their means to get there. All they saw was the end result, and decided that they were entitled to those results, because everybody has them, and the government made credit easy to get.

Now, interest rates are headed back up, and people are starting to have problems paying for their credit cards, their cars, and their houses. Many of the people who have the entitlement mentality opted for interest-only, adjustable rate loans so that they could have the house they thought they deserved, whether they could afford it or not. Now that interest rates are beginning to rise, so are their payments, and they're beginning to default on everything. And they're screaming for "somebody" to help them, and save them from the consequences of their own actions.

"Somebody" shouldn't have acted to enable these poor twits to behave like children by making credit so available in the first place.

These same gullible, irresponsible masses are also screaming that "somebody" should help them pay for medical insurance since it's so completely unaffordable.

It's not. The individual in question simply needs to be prepared to shop around and find the best prices on heath insurance, and take insurance with a higher deductible than they think they deserve--it's the low, or no, deductible plans that are so expensive. They also need to realize that "somebody's" interference is part of the reason medical costs are so high to begin with.

A while back, when someone needed a doctor, they paid what the doctor charged out of their own pockets. Insurance didn't come into things, and the doctor and patient set the costs between them. Doctors didn't overcharge, and people (usually) paid what was owed, even if they had to pay "in kind" or work out a payment plan. Eventually, as the population urbanized, health insurance became something people bought. Then, it became something offered instead of extra monetary compensation. Then, jobs began competing for workers by who offers the best.

Now, people think that health care that they don't have to directly pay for is a right. If they have to pay for their own insurance, many scream that "somebody" should be paying for it for them. Many complain that their jobs don't offer insurance, and that they "can't afford it" by themselves.

My spouse and I pay out of pocket for many things. We do have insurance, but it only covers catastrophic illness and accident. It doesn't cover sniffles, doesn't have maternity coverage, dental coverage, optical coverage, etc. It has a fairly high deductible--$3500 each per year--but covers 100% of costs incurred after that amount. It costs $150 per month for the two of us (1 male, non smoking, under 35; one female, non smoking, under 30). We've found that doctors' offices also offer a significant discount for paying out of pocket, and leaving out the insurance paperwork. For example, prenatal care was discounted a little more than $1,000; that savings nearly covers the overnight hospital stay that will, like as not, be all that's needed.

I'm sure there are those out there that think that we should bring WIC into this, but I was raised on the government's idea of health care, and I'd really rather pay my own way than accept "somebody's" interference.

Social Security is failing. Once again, that's not under dispute. No one is arguing that it's not. Everyone agrees that it needs to be fixed, but no one can agree on how. Why is everyone so worried about that program failing? Why not just not take those taxes out of our checks, and drop the program?

Simple: no one is saving for retirement. Everyone knows that they're paying taxes toward retirement. "Somebody" has taken the need to be responsible for our own retirement and reduced it. Unfortunately, the government hasn't been responsible with the money paid into social security(big surprise there), and it won't be there when many who are paying in now need it. In fact, many who are drawing on it are going to be cut off when it fails.

They didn't save. They'll be destitute. They're already screaming for "somebody" to save them. The only ways I've heard floated about that actually have support are to increase the tax rate on that particular "retirement" program for people still in the work force, and for taxes to be added to previously tax-free retirement savings plans.

None of this would be a problem if people had not lived above their means, bought houses they couldn't afford, chosen medical insurance that was more than just insuring them against medical bankruptcy, and saved for their own retirement. This whole financial mess that's threatening to topple our economy could have been prevented with a little personal responsibility.

That wasn't encouraged, though. "Somebody" wanted everyone to depend on them so that they could justify their existence.

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