The end of personal financial responsibility

by Guest on March 12, 2009

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The following is a guest post of Larry Mitchell of Out of Debt Christian, a daily blog about personal finances, frugality and faith.

Last week, U.S. Secretary of State Hillary Clinton presented Russian Foreign Minister Sergei Lavrov with a button that was supposedly labeled “reset” in a gesture to symbolize what she hoped to accomplish with the two countries’ relationship. Unfortunately, in a translation error, the State Department used the Russian word for ‘overcharge’ by mistake.

An overcharge/reset button? Sounds a lot like the current mindset of many Americans right now.

Stuck in a house that has declined in value? You’ve been overcharged, so hit the reset button. Can’t afford a mortgage you never should have applied for? You’ve been overcharged, so hit the reset button. Fortune 500 bank/automaker/insurance company that made investments or signed labor contracts that didn’t work out as you’d hoped? You’ve been overcharged, so hit the rest button.

Whatever happened to personal responsibility?

Nearly all of our current personal and macroeconomic problems are the result of bad decisions that each and every one of us made of our own free-will at the time. Sure, it’s easy to say that an economic bubble is to blame for all of these problems, but a bubble is the just the result of us collectively making a lot of bad financial decisions at the same time.

Now that many of us are facing personal financial challenges (and we all face national economic problems), too many of us are looking to just brush off our own choices and our own mistakes and push that overcharge/reset button. The new housing rescue plan will enable up to 5 million people to slash or refinance their mortgage (at taxpayer expense) to stay in homes that many of them shouldn’t have bought in the first place. A whopping 1.4 million Americans filed for bankruptcy in 2008, looking to hit the reset button on their personal finances. And the U.S. automakers are seeking billions more in taxpayer aid to stay in business, despite seeing sales fall by over 50% and entering into uncompetitive labor agreements year-after-year. They must have been overcharged, so just hit the reset button.

Stop blaming others

It’s time to stop blaming everyone else for our problems. It’s time to start looking to ourselves for solutions. If you can’t afford your current mortgage or your house has steeply declined in value, be honest with yourself about how you got into the situation. It wasn’t the bank’s or the realtor’s fault; you made the decision on how much to pay for the house and how to finance it. If your business (or Fortune 500 Company) can’t come close to making a profit, perhaps it’s time totally overhaul your business or just close up shop. Government aid is not a business model or how we should be looking to fill gaps in our personal finances. We all make bad decisions, so it’s time to own up to consequences.

I’m not trying to be heartless or paint everyone with the same brush, but until we each start acknowledging that our mess is mostly of our own making will we start to make progress in turning the tide of misfortune that many currently face. The term ‘bail out’ needs to exit our vocabulary, not become the first thought that comes to mind whenever there is financial trouble on the horizon.

Earn more, spend less, invest wisely, work harder, grow your business, and most importantly address your problems head-on with dignity and confidence. Finding our way back to personal financial responsibility is the American and the Christian thing to do.

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Atlas@mymoneyshrugged March 12, 2009 at 7:39 pm: Wow what a great post! I am with you on that somewhere along the way the mindset of Americans have changed. We got ourselves into this mess along with the government. It is time each and everyone of us do our part and its time for the government to stay out of the free market and let businesses fail and people to fail. You only learn by failing, no one ever gets it right the first time without taking some bumps and bruises along the way. The real beauty of capitalism is that it allows people and businesses achieve great success, but only because it also allows them to fail.

Also a quote from Jim Rogers “If you look to Obama and the government for investing advice, you will go bankrupt.”
sheila March 13, 2009 at 7:58 am: AMEN!!!!!!! We will all stand before God and account for what we did with the resources He gave us. We will not account for our government, our parents or our friends…only ourselves. Definitely keeps me from blaming others for any bad decisions I have made/will make.
Monica March 13, 2009 at 10:41 am: I am so glad that I’m not the only one with this mindset. Even before the economy went south, I saw people that at one time I called friends abusing the system with the mentality that they were “owed” something by the government. Some of them are still doing it.

Although I do believe some people were persuaded to do things that they shouldn’t have done, especially in terms of mortgages, there were many decisions made by automakers and within the housing market that should have been thought out thoroughly before they pursued those courses of action. Now I, my children and possibly my children’s children will be paying for these bad business decisions for years to come.

God bless America, and please grant us the wisdom to make better choices, not only for ourselves, but also for our brothers and sisters.
IM4GIVENANDBLESSED March 13, 2009 at 10:42 am: AMEN AND AMEN!!!!! This is a great post and soooo very true!! I enjoy christianpf.com…keep up the good work!
Larry Mitchel March 13, 2009 at 11:44 am: Thanks so much for all of your kind words! I believe that we all need to start speaking up about how we’d like to to solve our own problems (and encourage our neighbors to do the same.) Government help and bailouts should be a very last resort, not the first place you look to for help.
Steph March 15, 2009 at 8:48 pm: I absolutely agree with this 100%. I liken our situation to a dysfunctional family. The drunk/addict is the first to cast blame – “if only you didn’t (fill the blank), I wouldn’t drink or use. It is all your fault.” The other family members tiptoe around the d/a and then try to fix the errant family member. Late for work due to a hangover? Other family members call the boss. Ad nauseum. As a nation, we are enablers of those who make bad choices. Worse, we believe it is our fault (or some do anyway) and continue to enable bad behavior by “bail outs” or bankruptcy or whatever. This starts in the family and extends outward to the nation. We simply must take responsibility for our behavior, our bad choices and suffer the consequences. Until we do that, it will only get worse. Like the drunk/addict, perhaps our nation will hit bottom. It won’t be pretty when it happens.
Matt Jabs May 15, 2009 at 9:23 am: Sounds like we share the exact same point of view! Thanks for this.