In October 1998, President Hinckley said
So many of our people are living on the very edge of their incomes. In fact, some are living on borrowings.Financial forecasters are
We have witnessed in recent weeks wide and fearsome swings in the markets of the world. The economy is a fragile thing. A stumble in the economy in Jakarta or Moscow can immediately affect the entire world. It can eventually reach down to each of us as individuals. There is a portent of stormy weather ahead to which we had better give heed.
The assets shrink, but the debt doesn't. [Unfortunately], this is privatizing gains and socializing losses. And there is something very wrong about that. now saying that we are in for a financial fall at least as bad as the Soviet collapse of 1989 and likely as bad or worse than the Great Depression.
Gretchen Morgenson, New York Times Marketwatch
Gordon B. Hinckley warned us to live within our means. Some of us took it to heart, while others thought "Tisk, tisk. We are living within our means."
President Hinckley related some sobering statistics in 1998:
I repeat, I hope we will never again see such a depression. But I am troubled by the huge consumer installment debt which hangs over the people of the nation, including our own people. In March 1997 that debt totaled $1.2 trillion, which represented a 7 percent increase over the previous year.Those statistics are far worse now. President Hinckley didn't live to see a new Great Depression,
In December of 1997, 55 to 60 million households in the United States carried credit card balances. These balances averaged more than $7,000 and cost $1,000 per year in interest and fees. Consumer debt as a percentage of disposable income rose from 16.3 percent in 1993 to 19.3 percent in 1996.
Everyone knows that every dollar borrowed carries with it the penalty of paying interest. When money cannot be repaid, then bankruptcy follows.
while Gordon B. Hinckley was telling us to get our houses in order, we were instead listening to the financial lender who convinced us that we could qualify for twice the house we knew we could afford.but it looks like we did.
The biggest problem with the bailouts is that the supposed free marketeers believe in privatizing gains when things are good, but socializing losses when stormy weather hits. Imagine what Republicans would be saying if a Democrat administration had just socialized Freddie Mac, Fannie Mae, and AIG.
Floyd Norris of the New York Times called it "21st Century Socialism". Gretchen Morgenson of New York Times Marketwatch said on Bill Moyers journal
The assets shrink, but the debt doesn't. Ad so you have to pay that debt back, and that's a difficult thing to do.It's that simple. But while Gordon B. Hinckley was telling us to get our houses in order, we were instead listening to the financial lender who convinced us that we could qualify for twice the house we knew we could afford.
It took ten years for it to happen. But don't say that someone didn't warn you about it. I don't need to tell you that you're dumb if you didn't listen.