Madd Money: Feel Like An Idiot For Following the Rules?

I try my best to steer clear of politics in general since:

a. I’m somewhat non-partisan; I’m an equal opportunity cynic to both major parties, though my registration and general sympathies are as a Democrat (and a moderate one at that)

and

b. I tend to believe that we as people have way more power over our own lives than any politician or government entity.

However, I’m looking around at the way things have transpired in the past few months, and the largesse that is being offered (which we as taxpayers are footing the bill) to individuals and institutions, and I’m getting to be more than a little bit frustrated at a few of these turns of events. See, it’s interesting that the government is rushing to the aid of people and institutions who effectively cooked their own goose, whether through ignorance, negligence or greed (probably a combination of all three). I’m not a completely heartless or clueless git; I realize that not doing anything could cause major repercussions in both the domestic and world economy. Yet I find it ironic that people who made a bad deal and are now suffering for making a bad deal are looking at getting some “relief”, while those of us who worked hard, played by the rules, and lived within our means the whole time will get nothing, nada, zilch, butkis. In fact we will have to bear the burden of these people's mistakes!

Back to the “I’m not stupid” part (well, I pretend to not be, but jury is still out as to whether or not that statement is entirely true), I happen to be in a lucky situation. First, I was fortunate in that I was able to make a large enough down payment to have a small mortgage and, second, through various means over the past ten years, I’ve been able to pay it all off. What that means is that I have 100% equity in my house. However, I don’t treat my house as an “equity position” or an “asset”, I treat it as exactly what it is, paid-for shelter for me and my family. That’s its worth, and what it is worth in the marketplace on any given day really doesn’t matter too much to me. What does matter to me, though, is that, even though I own the house free and clear, I could have it taken away from me if something doesn’t happen. That is, if I lose my job and can no longer afford to pay my property taxes (kinda’ sucks that I can own my own home free and clear but still have to pay rent to the government, and they can take my home if I can’t or don’t pay it).

Even though I have a fully paid for house, I can’t just sit around and be complacent; if I lose my job and cannot get another one sufficient to pay my property taxes, I could lose my home. For those curious, I bought my house in 1999 at the peak of the dot-com boom, after a run-up of housing values, but nowhere near the psychotic level of run-up that followed the dot-com bust. Translation: my property taxes are substantial, and take up a good percentage of my take home pay. I still count on having a job to keep the roof over my head, and when all is said and done, I’d like to keep that job.

Whether or not I like the bailouts of Wall Street, Detroit, homeowners or people with credit card debt that they cant pay for anymore, I have one thing going for me that they do not have, and that’s an almost total lack of anxiety of my own situation. Sure, I was responsible and I took care of my own house and didn’t spend beyond my means (actually, that’s not entirely true, but I’ll save that confession for another post coming soon), but we made it a point to pay for things with assets we had on hand rather than rack up debt. We made a massive down payment for our house that we saved a decade to produce, and we took a mortgage that was no more than twice my annual earnings and that could be paid back with no more than 25% of my monthly take home pay (as related to a fix rate, 30 year mortgage… you know, the rate that was once upon a time touted as what a responsible borrower would take and no more). Yes, people will be getting help. Yes, they may see some debt forgiveness, and yes, they may walk away from some obligations. Many will also walk away from these obligations in a state they probably wouldn’t want to walk away as: ruined.

That’s a word that doesn’t get used much anymore in our politically correct climate of today, but my grandparents used that word a lot, and I still know what it means. To be ruined is to have your credit, your reputation and your name damaged. Credit ratings for anyone who goes through these plans will be trashed for years. Their own reputations may take a hit because of this. Once upon a time, when a man was determined to be "ruined", he often saved face by committing suicide. Now realize, I’m not heartless (really, I swear!), and I'm hardly advocating anyone off themselves for geting into a bad financial situation, but it contrasts the fact that, for many, one’s name and one’s word are less valuable than they used to be. So yes, I guess I won’t be getting any help or any “bailout” from the Government over this, and frankly, that suits me just fine.

Still, before I get too high on my horse and run the risk of being hoisted upon my own petard (wow, now *that's* mixing metaphors, baybee (LOL!)), I just have to remind myself that, if we get into a spot where unemployment runs rampant, and I find myself out of work because of no bailout, with little hope of finding additional work, and I have to give my house up because our system is so broken that even those of us who played by the rules and honored our obligations can’t even pull it off... well, I guess I’m willing to swallow that bitter pill. I come from a line of family that put a lot of emphasis on “protecting one’s name”, and as for me and my house, we intend to continue playing by the rules, meeting our obligations wherever they may exist, and doing all we can to hang on to “our good name”. Here’s hoping that the current round of unpleasantness and the less than pleasant approaches to solving it allow the majority of us to do exactly that.