Credit score is such a example where spenders are rewarded but one is not if he/she buys with cash. It is greed at its worst.

I think there needs to be a third separate category- the speculator. Not really spending per se, but not content to merely keep (save) the wealth he may have created/earned, speculator’s collective greed is (was) one of the driving forces of the housing bust->economy problem. I believe in the risk/reward corollary and people that were nearing their retirements should have gradually shifted their investments into more stable and secure investments- gold, say. Younger investors have the time to recoup their losses without it being so catastrophic. (So no finger-pointing from the soon-to-retire baby boomers or blame-it-all-on-the-liberals rants allowed- this fundamental bit of economics I’m sure is taught in 101.)

Moreover, the greedy bastards that bought multiple houses as investment tools with no intent to ever live there drove up the housing market prices and furthered the continually-rising-price-myth which further enabled the liar/ninja loans etc… On the other hand if you were in the market to buy a home to actually live in, particularly in CA where I live, you saw homes that were obviously priced way above their intrinsic values just because the ever-touted free market would bear it. (You can look on Zillow.com’s historical value graphs on individual properties and see the almost universal price spike around 2005 when it really started.) It was those speculators’ collective greed (and thus risk) that got them out there on a limb- and it is with glee that I now watch them suffer as their psychologically induced financial feeding frenzy ended with a pop. Unfortunately, the savers, the spenders- we are all in this together now and we will all have to dig ourselves out of an ever-deepening hole. Ironically, the savers are forced to spend… And the spenders are forced to… well, spend- but they will spend on something different (taxes instead of the TVs, cars, and houses they couldn’t afford), which is kind of like saving in that it forces them out of their previous bad spending habits(excessive consumerism) into new ones that will hopefully stick once the coming high tax period is over and the true fiscal conservatives (whoever they are and wherever they went to) regain power.

I agree with most of what is said above- CC debt is bad, federal debt is bad (but perhaps a necessary evil if we look beyond the myopic 4 year blinders that most POTUS administrations wear and actually start fixing instead of postponing our problems (i.e. infrastructure, energy, health care, etc)- but that’s another post) People need to live within their means and they are just as guilty, probably by and large, as the corrupt financial institutions that got them to sign the fine print on these ARMs without reading/understanding them. It looks like our government is not holding either of them accountable though, maybe because when you add the evil/corrupt free-market businessmen to the dumb give-me-a-handout sheep (the masses, apparently), you probably have most of the country on your hands- certainly a majority in the voting base. And politicians just give people what they think they want, even it means avoided blame and deferred debt payment.

Anyone who invested heavily in the mortgage companies was committing the same sin as above said sheep which was to assume that home prices would continue upward and betting the farm/house on it. Anyone who risked their retirement on investments heavily weighted in a booming housing sector (i.e., mortgage companies) should have been around long enough to know that real estate comes and goes in cycles- up/down, boom/bust. So they were greedy and foolish. pfffft.

Again, going down the savers’ list- CC debt bad, agreed- driving paid-for cars, agreed (see living within one’s means), paying down your mortgage, agreed (you still own your home, no chance taken on the gov bailing you out), having cash on hand, agreed (maybe gold is better hedge against inflation though), paying taxes and social security, good (although the spenders pay taxes too, no- does these two items really belong here?) 401K/IRA – this is where I draw the line between saving and investing. So it’s not really saving is it, it’s investing (again, risk/reward). Everybody is really clamoring about their lost “savings” but it’s really the loss of their investments that they mourn. If it were really savings, such as cash on hand or a paid-for car/mortgage, then these things persist beyond the downturn. So what? It’s not like the government is seizing everybody’s gold again. (Add financial and mental security to the list of savers’ benefits.) You save, you keep. Simple.

IMHO, the big-time financial criminals should be treated like China treats their own (massacred, and for good measure and an American twist, all on Friday night prime time TV as an example to the other would-be villains). The auto companies should be allowed to fail so that they can fully shake the unions and emerge long term solvent/competitive. The banks should be allowed to fail and no golden parachutes this time. The people who bit off more mortgage than they could chew should be penalized not rewarded (but due to the sheer number of them, probably impractical to throw them all out on their butts.) And investors/speculators (not to be confused with ignorant first-time home buyers or the true savers) should learn that markets and governments are fickle and unpredictable in the long run. As Aesop said, “Grasp the shadow and lose the substance.”

Ironically, I am all for government spending as an investment in our future (like infrastructure and energy). Hopefully, our current high-stakes gamble will pay off and then we can get out of the hole and back to saving.

It seems clear to me that it is the only thing left to tax except perhaps the air. Wait, they do tax the air by the money to the EPA.

They’ve cut back the time it takes them to intervene when you get in trouble from 39 weeks to 13 weeks.

So rather than work hard I could be just as well of by quitting my work and living rent free (in my own home) for the rest of my life!