From My Perspective - - -

One of the wiser Financial Consultants in the country is Dave Ramsey. Following are his remarks and ideas about the current State of the Economy in the United States. Consider some of his observations regarding the economy and the bailout debate by the U.S. Congress  - - -

“Over the past month, we’ve witnessed the largest bankruptcy in history, the stock market dropping like a rock, and the talking heads on TV freaking out that the world is coming to an end. I’m here to tell you the truth—we’re going to make it. We’re going to be fine. Take a chill pill. This month I’ve compiled some of the most-asked questions I’ve gotten recently from you:

“Are we okay, Dave?

“Definitely. Remember Enron and WorldCom in the recent years? We survived that. But much worse than all this was the financial crisis of the ‘80s – S&L collapse and 1,000 bank failures in 2 years. We’re nowhere near this type of thing; that was probably 50 to 100 times worse than all of this.

“What does all of this come back to?

“Greedy banks financing homes to broke people. It all seemed to work okay in their minds when the economy was booming, but when the economy slowed a little bit broke people quit paying on their sub-prime mortgages…No wonder they went out of business. Stupid decisions.

“Is there anything we can do to fix this bailout mess?

“YES! Here's a quick summary: Companies that had billions in sub-prime loans were feeling the effects of their stupid decision to make those loans in the first place, and practically gave them away for pennies on the dollar. But since no one wants these loans, and they've had to mark them down to market value, it has frozen the market. If we temporarily change the rule that forces companies to do that, that will free the market up. This is an absolutely huge deal, and it involves everyone getting in touch with their congress person before we spend hundreds of billions of dollars that we don't need to!

“Will the collapse of businesses and banks affect me?

“No, not unless you work there. Thousands of stock brokers on Wall Street have lost their jobs in the past few weeks, but that happens in other industries across the country in good and bad times. This time it just happened in NYC where all the national news media is so they made a big deal of it.

“If I have 401(k) money in a Merrill Lynch or AIG trading account, should I move the money elsewhere?

“No. Your money isn’t with them; your 401(k) money is in the stocks. These big companies are just managers (unless you directly own stock in their company). Look at it this way—if I owned 6 rental properties and hired a management company that eventually failed, I would still own the properties; I just wouldn’t have a manager.

“Should I sell my US stocks to buy gold and foreign stocks?

“Absolutely not! Why would you think foreign stocks are any better than US stocks?”

Consider these things with me - - - and remember that our trust and confidence is never to be in temporal things – “Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal.” Matthew 6:19 through 34 is still viable and to be embraced and applied by each of us. So do not be unduly anxious but continue to “Seek FIRST the Kingdom of God and His righteousness and all these things (what you need to eat, drink, wear) will be added to you!”  That’s God’s commitment to us and the true bottom line is He can be trusted because He has never failed – and never will. A closing remark by Dave Ramsey states: “Remain calm, America. We’re in a slow time, but just pay your bills and you’re going to be fine.” We should add: Keep looking to the Author and Finisher of your faith - - - He alone will see you through each and every crisis.

From My Perspective - - -

In current times, the number of both Foreclosures and Bankruptcies has been steadily rising. To be Bankrupt means: “(Law) A debtor that, upon voluntary petition or one invoked by the debtor's creditors, is judged legally insolvent. The debtor's remaining property is then administered for the creditors or is distributed among them.” There are six types of bankruptcy under the Bankruptcy Code, located at Title 11 of the United States Code: (1) Chapter 7: basic liquidation for individuals and businesses; (2) Chapter 9: municipal bankruptcy; (3) Chapter 11: rehabilitation or reorganization, used primarily by business debtors, but sometimes by individuals with substantial debts and assets; (4) Chapter 12: rehabilitation for family farmers and fishermen; (5) Chapter 13: rehabilitation with a payment plan for individuals with a regular source of income; (6) Chapter 15: ancillary and other international cases. The most common types of personal bankruptcy for individuals are Chapter 7 and Chapter 13. (As much as 65% of all U.S. consumer bankruptcy filings are of the Chapter 7 variety.) Corporations and other business forms often file under Chapter 7 or Chapter 11.

If you are the Federal Government, how would you view the condition of Bankruptcy? The solution is simple: (1) print more money (which devalues the dollar in world markets); or (2) increase the National Debt Level (let those who govern in the future pay the Debts being accrued today). Interestingly, this is what the Congress of the United States has just enacted. Housing Legislation was passed that proposes to do some of the following: “The legislation…aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration. The FHA could insure $300 billion in such mortgages (Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure)…The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it… Democratic leaders, recognizing that the measure could be one of the last items to become law during what's left of their abbreviated election-year schedule, tacked on an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.

 
The nation will now have a National Debt of almost Eleven (11) Trillion Dollars. To understand what One Trillion is equivalent to, “If you had gone into business on the day Jesus was born, and your business lost a million dollars a day, day in and day out, 365 days a year, it would have taken you until October 2737 to lose a trillion dollars.” Our Government (US Senate) increased the nation’s debt by almost One Trillion Dollars this past Saturday. Our current Total Income Taxes cannot service the Interest on the National Debt. Our nation is fiscally Bankrupt!

The Word of God warns about carelessness with ones finances: Proverbs 22:26-27, “Be not one of those who give pledges, who put up security for debts.  If you have nothing with which to pay, why should your bed be taken from under you?” And then, the rhetorical questions in Proverbs 6:9-11, “How long will you lie there, O sluggard? When will you arise from your sleep? A little sleep, a little slumber, a little folding of the hands to rest, and poverty will come upon you like a robber, and want like an armed man.” As tritely as it may sound, if one wants to be totally responsible and fully blest by God, there are certain Financial Factors one needs to have in place: (1) Tithe no less than 10% of one’s Gross Income on a regular basis; (2) Save 10% of the Gross Income in an Interest Bearing Account in an FDIC Bank; (3) Budget the Balance of the Income in a regimented and frugal way for housing, utilities, food, medical, transportation, et. (And try NOT to exceed the designated amounts); (4) care for the genuinely poor and needy in a charitable manner (invite them to share a meal in your home; or bring them a meal rather then send them to a restaurant – this is called in Scripture: “Show Hospitality!)…

Think about this with me - - -