Sunday, January 25, 2009

Deep in Debt, and Now Deep in Worry By Ben Stein

Deep in Debt, and Now Deep in Worry

By BEN STEIN January 25, 2009 New York Times (Excerpt)

NOT long ago, a woman in California called me for advice. She is divorced, with two children, and has a series of interlocking financial problems.

She lives in a lovely home in a stylish inland enclave. It has an interest-only mortgage of about $2.2 million that requires a payment of $12,000 a month, very roughly. It was last appraised at $2.7 million, but who knows if it’s now worth anything remotely close to that price.

The woman, whom I’ve known since she was a teenager, has no job or other remunerative employment. She has a former husband, an entrepreneur whose business has suffered recently. He pays her $20,000 a month, of which roughly half is alimony and half child support. The alimony is scheduled to stop this summer.

She has a wealthy beau who pays her credit card bills and other incidentals, but she is thinking of telling him she is through with him. She has no savings and has refinanced her home repeatedly, always adding to indebtedness and then putting the money into a shop she owns that has never come close to earning a dime. Now she is up all night worrying about money. “Terrified,” as she put it. She wanted me to tell her what to do.

What could I say? I did the best I could, but I had to tell her that she was on very thin ice.

Ever since, I’ve been thinking of the troubles of this sweet woman, consumed with worry about money….

And all of this is compounded again because my handsome son, age 21, a student, has just married a lovely young woman, 20. You may have seen on television the pudgy, aging face of their sole means of support.

I have been pondering what advice to give them about money. What I keep coming up with is this: Do not act like typical Americans. Do not fail to save. Do not get yourself in debt up to your eyeballs. Work and take pride and honor from your work.

Learn a useful skill that Americans really need, like law or plumbing or medicine or nursing. Do not expect your old Ma and Pa to always be there to take care of you. I absolutely guarantee that we will not be. Learn to be self-sufficient through your own contributions, as the saying goes.

This advice has served me well. It was propounded to me by my late father, who often said, “Be prudent.”

MY work as a freelance writer in Hollywood some time ago prepared me for extreme uncertainty. This is the most insecure existence imaginable. It mandates saving, ingenuity and nonstop work and creativity. Freelancers never have a day off. Never.

They know that they can go months without a check. They absolutely have to save.

They have to have five different levels of fall-back plans and financial escape hatches.

I am well past that now. Decades past. (I hope.) But the habits of thought linger, at least a bit.

I wish I could teach that work ethic to those close to me. I wish I could teach them that money is a scarce good, worth fighting for and protecting. But I very much fear that my son, more up-to-date than I am in almost every way, is more of a modern-day American than I am. To hustle and scuffle for a deal is something he cannot even imagine. To not be able to eat at any restaurant he feels like eating at is just not on his wavelength. Of course, that’s my fault. (I have learned that everything bad that happens anywhere is my fault.) And I hope to be able to leave him well enough provided for to ease his eventual transition into some form of self-sufficiency.

But I keep thinking of my friend in California, and what a perfect specimen of what we have become that she has become. I keep lecturing my son, as Pop lectured me, to learn prudence. I keep lecturing myself to learn it; I am far from a small player in the extravagance game.

Maybe, upon second thought, I did not learn well about prudence. Then I think that maybe it’s too late for far too many of us. The age when money was a free good, available in unlimited quantities just for signing a note, may well be over. What the heck will we do when we have to start acting like mature adults? How will we cope with limits? With reality?

America, a nation of free-spending Peter Pans. Where are our moms and dads when we need them? It’s their fault."

Ben Stein is a lawyer, writer, actor and economist.


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At 12:08 PM, Anonymous Joe said...

Ben always seems to make sense when he speaks. Why can't we have people like him in Congress instead of Liberal Loons like Nancy Pelosi and Harry Reid? Look at the financial mess that California has been in. Governor Pete Wilson left that state in the black. They had surpluses galore when he was Governor. Then they elected Governor Gray Davis, a foolish tax and spend Liberal who ran that state into the ground. Arnold S. isn't that much better than Davis as far as I'm concerned. In my state of Massachusetts, we have another Liberal for a Governor, Deval Patrick. He's scratching for money right now, and is about to cut employees benefits and needed services in the Commonwealth, but he's not going to cut funding for Gay causes or his Global Warming Green policies. That to me is stupid. As far as I'm concerned, that Green crap can go on the back burner right now. No one has proved that man is a direct cause of Global Warming, so what the heck is the sense of pouring money that they don't have, into this right now? I've said this before, and I'll say it again; It's all Global Bologna! The people get what they deserve when they vote for these foolish Liberals. Barney Frank got elected again. He was the one who helped cause this financial mess that we are in right now. The people in my state voted for legalizing small amounts of "pot", thanks to a bill that Barney pushed through. Now the police departments are all banding together to try and come up with some local city and town policies to put a damper on this new flawed law! Things are bad enough in my state and now we have this to complicate things even more. If I had my way, I would take Frank, and a few others of his Liberal ilk and have them tarred and feathered and run out of my state on a rail! "Ooooh, but we can't do that!" "Why,--he's a Democrat!" "He's one of us!" I swear to God! The people in my state are so stupid that they would vote for a brick if it was running along their stupid Democratic Party lines.


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