I imagine that you, like I, have been following the news; well, that is unless you are one of those people who prefer to destroy precious brain cells by instead following the latest childishly idiotic escapades of Britney Spears or maybe the ongoing high jinks on television’s hottest new so-called reality show. But, again, if you have been following the news, you are probably aware of the sub-prime-loan fiasco and its fallout. On the other hand, if you are among the brain dead, allow me to fill in the blanks: In a nutshell, it’s like this: Millions of borrowers have either already lost their homes or else are in danger of losing their homes because they financed those homes under adjustable-rate mortgages and when the interest rates adjusted, which is what happens with adjustable-rate mortgages, said borrowers found themselves unable to make their monthly payments.

Now before I say anything else, please allow me to clarify one thing, which is this: I fully realize that some lenders in effect duped some borrowers. However, the key word here is “some,” since most lenders did not dupe most borrowers but instead fully disclosed and explained the terms of the mortgages being taken out to the aforementioned borrowers. Moreover, neither did the contracts signed by both lenders and borrowers contain any clauses written in invisible ink or, for that matter, lemon juice (When I was a kid, my siblings and I would write messages to one another in lemon juice, messages that only became visible when the receiver held a match beneath the sheet of paper upon which the message was written, well, that is, unless the paper burst into flame, in which case the message was lost and the receiver’s fingertips were usually singed). Anyway, my point is that, in most cases, the aforementioned borrowers knew exactly to what they were agreeing by putting their John Hancock on the dotted line on those mortgages. They were agreeing to pay a certain initial amount each month for an established period of time in order to obtain the home they wished to purchase, and they were also acknowledging that they were aware the interest rate would adjust in the future and, when it did adjust, the payments on their dream home would naturally increase.

The problem, apparently, was that many of the borrowers who put their John Hancock’s on those dotted lines must have thought they would be making far more money by the time that interest rate adjusted.

“Hey, Honey,” says Mr. Borrower to Ms. Borrower, “I know I’m only bringing in $8.00 an hour now, but in two years I’ll most likely be bringing in $8.75.” 

Then again, maybe Mr. and Mrs. Borrower thought they would win the lottery. I don’t know. What I do know, however, is that many of these borrowers obviously had, as my mama would say, “Eyes a whole lot bigger than their stomachs.”

“What on earth does that mean?” you ask.

What it means is that those borrowers bit off more than they could chew.

With a groan, you now say, “Spare me the clichés.”

Clichés or not, those old adages contain much truth since it seems that people today think they have to have it all—the fanciest new car, the widest screen plasma television, the hottest new technological gadgets, the most expensive brand-name sneakers, and the biggest house on the block—and it doesn’t matter whether or not they can afford those things. The bottom line is they believe they are entitled to them. After all, this is America, Land of Opportunity, as well as a country of reckless unthinking consumerism. 

So now the chickens have come home to roost (Yes, that’s another cliché, so sue me.) The sub-prime interest rates on those loans adjusted, as they were apt to do; and borrowers’ house payments increased, as they were also apt to do. And that is why the housing market in this country is in such a crisis. But guess what? Uncle Sam is coming to the rescue, although the taxpayers (you and I) are going to foot the bill. Yes, that’s right, because just last Saturday, the U.S. Senate “overwhelmingly approved a massive rescue bill,” under which “homeowners facing foreclosure would receive refinancing from lenders that agree to drop their interest rates (As an aside, the article from which I just quoted, which was in Sunday’s edition of The Advocate, my newspaper of choice, also relates that “many officers in such companies are receiving salaries in the tens of millions of dollars;” but that’s material for another blog) (Shields, 2008, p. 1A, 4A). 

Now for my final thoughts on the matter: I really have a problem with this rescue bill because, although I realize this country’s economy is rapidly swirling down the drain and into the sewer, I was raised to believe that if a person cannot afford something then he or she should do without, regardless of how coveted any given object might be, or he or she should save to buy that object. For example, when I was a little girl, probably around 10 at the time, like my siblings, I received a 50-cent allowance every two weeks; but there was a horse statue (a black-and-white pinto) I spied on the top shelf at Vickers’ 5 & 10, and that statue cost the huge sum of $1.50. Thinking maybe my daddy would give me an advance if I put on my most pathetic face, I went to him and told him how much I wanted that horse statue and that I just had to have it. What did my daddy do? He looked at me and said, “Well, I can’t give you no advance, so I reckon you best start saving your money.” Then he shrugged as he added, “Course, I reckon you’re old enough for your wants not to hurt you.”

Yes, I was old enough for my wants not to hurt me, but since I truly coveted that horse statue, I decided Daddy was right; I needed to start saving my money. And that is exactly what I did. I saved that 50-cent allowance for two months, after which I marched into Vickers’ 5 & 10, plunked those four shiny half dollars onto the counter, and walked out of that store the proud owner of a black-and-white pinto horse statue. And do you know what? I had enough money left over to buy a Coke and the latest Archie comic book. Now that is thinking consumerism.

Shields, G. “Senate passes housing measure.” Washington Bureau. The Advocate. Baton Rouge, LA. Sunday, July 27, 2008.