Wednesday, December 9, 2009

Egonomics

Some of you might know that I worked for a bankruptcy attorney for about 10 years of my life, starting in high school and ending well after college.

It was -- I swear -- the best job of my life.

Anyway, a person learns a LOT working for a bankruptcy attorney, like for example how much money people make at different jobs, how much car payments are, how BAD people are with money, etc.

When a person files bankruptcy, he has to file what's called a "petition" that includes all MANNER of financial information: who they owe money to, where they work, how much money they make each month, how much money they spend each month, etc.

It's the income and expenses sheets that were always my favorites to fill out.

One person would indicate they spent $100 a month on food. Another would put $800. It was all very informative and fun to play around with the numbers to make them more accurate.

(This was before they changed the laws and I believe now there are certain amounts that are "allowed", but back then you could pretty much put whatever you wanted)

One time -- I swear to you -- a man who was a financial aid counselor at my college could not fill out these forms. I had to help him fill them out.

So anyway, these were called "Schedule I" (income) and "Schedule J" (expenses).

The goal when filing bankruptcy in the old days was to show more expenses than income NOT including the credit card bills.

For most of the clients, this was not difficult.

They had $500 for their RV payment. And then $300 for the salon. And $200 for cell phones. And another $200 for cable. And so on and so forth.

You know, expenses they NEEDED.

A lot of the times, I wanted to tell them "Look, just go to Fantastic Sams, cancel the cell phones, cancel cable and PAY YOUR DAMNED BILLS!"

But of course, I was not paid for that, so I said nothing (except to my boss because we could laugh together about how crazy people are).

So when I heard this week that President Obama (the economist) suggested we needed to spend our way out of the recession, I thought "It's very possible that man has not seen a schedule I or J in his life."

I think that he needs to sit down with one.

Fill out the income of the country. ALLL the income. EVERY CENT that's paid.

And then fill out the expenses.

If there's anything left over, then you can spend something.

If not, perhaps you need to consider filing bankruptcy.

It's that simple.

I don't understand why families EVERY SINGLE DAY make financial decisions based on the simple equation of income in - income out, but for some reason on the government level that equation gets thrown out the window and the country starts "charging its credit cards" so to speak.

I'm reminded of what Frank would tell our clients before filing: "If you need anything, like tires for the car, clothes for the kids, etc., go ahead and use the credit card to buy them because you won't be able to buy anything for a long time."

I can't help but think that's how Obama feels about his grand healthcare plans.

Buying on credit something we don't really need and definitely can't afford.

Maybe I'll send him an I and J for Christmas.

Maybe I'll ask Frank to write a cover letter for me.

He was always really good at those.

3 comments:

Annie said...

Well said! :)

Mama Parker said...

Amen.
Not only does this make sense about the economy but a couple of my friends come to mind.
I mean do you really need "fake nails and my hair weaved every other week?" when you can't even pay your mortgage....they must be under the impression Obama is just going to BAIL THEM OUT.
For everyone else who pays their bills on time we are going to raise taxes. Have a great day.

Mama B said...

Well said, well said!