It’s kinda weird to talk about, in light of what’s going on in my life, but in a strange way this credit mess can actually be a good thing, if you look at it with the right perspective.
Up until now, credit has made up a large portion of our GDP. It’s been a big part of household spending, and it’s been destined for failure.
What this financial mess has done is focus people on the fact that they cannot continue to have the expectation that tomorrow will come, that they will always have a pay check, and that things will continue to be as they were.
As the reality of my job being almost done proves, none of these things are for sure. And yet credit relies on this false assumption that things will always be the same or better.
So, how does this translate to the financial crisis? Because people are seeing, firsthand, that they need to be better prepared. They need to have their money wisely invested. They need to have emergency funds, and they need to have less debt. When the “unthinkable” happens, they need to be prepared.
So, if this financial mess gets more people to pay cash rather than credit, if the fact that easy credit may be going away, to be substituted by harder credit, if we find that the government may actually be able to scale back—then the financial mess may have a positive outcome, rather than negative.