Numb3rs

$700bn bailout plan proposed,
House votes down the bill by 228-205,
777.68 points gone in one day.

And the panic ensues.

Ok, lets get away from the scaryness of the market since it's all out of context anyway. Sure, you can get on the TV and have Suze Orman scare us by throwing out numbers like 1 trillion dollars lost on the market today. That number may be true but on the whole, like the numbers I started with, it's irrelevant to you and me.

The relevance comes in when we talk about credit and lending. There is less of a tendency to lend and extend credit now. So what does the media focus on in regards to this? "Oh woe is us!! No one will get loans! No credits cards! The economy will halt!!"

In an homage to a hero of mine....FALSE!

Let's talk numbers again.

300-850 is the range of possible credit scores
680 is the national average credit score
700 is a good credit score
13% of the nation's population has scores above 800.

So, while 58% of Americans have credit scores above 700, roughly 15% of the population has a credit score lower than 550. What does this all mean?

Well it means that a majority of Americans have NOTHING to worry about. If you have a good credit score, your bank, your creditors, will be more than glad to lend to you. The downside is that, more than likely, atleast 1/5th of America has absolutely atrocious credit scores and are probably in debt up to their eyeballs. I am talking about making minumum payments on credit cards, living above your means, having no clue about your fiscal situation. Those people...I hope they like Ramen Noodles.

It is a sad fact that living in debt is a way of life in America but it is sadder still that it takes a massive collapse of major banks and the economy to wake people up to the fact that this is bad. If your biggest concern is that your credit limit may shrink, my friend, you are so late to the party that it's not even funny. But it's ok, so is the media.

For years there was no outrage about America's growing dependance on credit. No one was concerned. In fact, we were blase, apathetic, and complacent. The banks were giving credit cards to anyone who could sign their name (I started getting offers when I was 16) while the media, economists, the government, and the people were too busy with whatever it is that they were doing. And suddenly, when it got so bad that people were buying houses with money they didn't have and the madness toppled the market, lo and behold, we are told we have to pay off our credit card debts.

Now don't get me wrong, it should be said, it needs to be said, but the manner in which we say it...the "father knows best," "here is some advice," type of attitude is just wrong. It makes it sounds like because of this bad economy we can't have debt anymore. No, we should NEVER have credit card debt, it is NOT a way of life, and any indiction to the contrary is just dangerous. That's what we should say. Stop coddling people. It's too expensive.

But here is the bottom line. If you are getting hit by this problem....odds are, you were part of the problem. There are no innocent bystanders in this one.