Two sides to credit, basically, two parties. The person that is owed and the person who owes. The one that owes is the key. They are the consumers, the ones buying stuff, going into debt to do it. More debt that the ability to repay the debt.
I see a great deal of restructuring necessary in the finances of the average family, the small business, the large corporation. No one understands the concept of spending what you have, actually, (my granddaughter says that), you cannot spend more than you have. You borrow, and go further down the hole.
This other side, the person owing, the business owing, anyone, we as creditors must take an interest in the wellbeing of our debtors. There is bankruptcy court, it is legal. Anyone (business too, but our Supreme Court said corporations are people too), can discharge the debts. Chapter 7. Gone. No chance. At times, rare, but at times, if there are assets, we get some of our money. Mostly we don’t.
From this standpoint, thankfully, approximately 10% of our debtors file, less, I am not even sure how low. That’s how low. But 10% of a couple of trillion, try 20 trillion, no one knows how much actual debt is out there. But 10% of that is a very big number. 10% loss on a balance sheet, means the shareholders will not be happy. So, it is significant. We don’t not want to increase it. What we want to do is decrease it, if we can, prevent it, by assisting the people we collect from, with their finances. Setting up a budget top liquidate debt. A plan to get out of debt.
I don’t think anyone will. I think it is a sort of Nirvana, a place we like to dream about. Thoreau tried. He came home. He missed people. So, with people, there is trade. Trade is necessary. It is how we stay alive. We trade our skills for another. We use money to exchange value, sometimes our trade is not even. Need more loaves of bread to buy the services of the plumber. That’s commerce. Whatever the market will bear. Nothing altruistic. I’m not suggesting inviting people home to supper.
Take the finances of the debtor, as if they were a customer. A bank has customers who owe. They make it nice and pleasant. You pay your bill. The bank is happy. Stockholders are happy. The bank loans you more, because they are so happy. That’s’ credit! The other side. The side of the “people” paying you back.
My son gave me a plaque with a quote from Oscar Wilde. It is on the wall in my office: “Borrow money from a pessimist, they don’t expect it back”.
Well, I do. I need to, that’s the system. That breaks down, and maybe sharpen your axe. We have an administration that knows how to borrow. Worse, how not to pay it back. That hurts someone. The guy who loaned the money, performed services on your home, your doctor, the bank. It cannot work making the debtor an enemy. He is our friend, we should worship him, honor him, so he keeps on buying. We need to show him how to manage all this debt we are burdening him with. Not a government program, me. When I speak to someone, a debtor, our new client, I try to come to an understanding.
When President Obama took office, he stated, “There is no last word in diplomacy”. I don’t know where he got it. I don’t care. I heard it, I liked it, and I have made a business out of it.
