Forget governmental advisors and Harvard economists – we’d be better off setting our national financial policy with the “Duh!” advice from pop money shows. I would love to see Ben Bernanke call in to the Suze Orman show for the “Can I afford it?” segment…
SUZE: Hey everybody, we’ve got a special caller today! It’s Federal Reserve Chairman, Ben Bernanke!
BEN: Hi Suze. Thanks for taking my call. Love your show. I’m a big fan.
SUZE: Thanks, Ben. Right back atcha. So, what can I do for you today?
BEN: Well, I know you normally take only one question per caller, but since these purchases are going to effect say, three hundred million or so people, you mind making an exception and running down a little list for me?
SUZE: No problem. Lay it on me. What do you want to buy?
BEN: Well, first I’d like to give everybody around $300 bucks, so it’ll cost me about $145 billion, give or take.
SUZE: I’m all for being generous Ben, but give me a little background here. Why do you want to make this purchase?
BEN: Well, I’m sure you know from all your callers – the economy has pretty much tanked. People are losing tens or hundreds of thousands as their houses are being foreclosed and well, back in ’02, the last time this number was checked, the average American had about $8400 in credit card debt, so it’s gotta be more now. I thought $300 bucks for everybody would fix it. At the very least everyone’ll buy iPhones and resurrect the economy.
SUZE: Well, Ben, you know the drill here. Before I can Approve or Deny your purchase, I need to know about your finances. First, tell me how much you make?
BEN: Last year we pulled in about $2407 billion.
SUZE: Not bad. And how about your expenses? What do they run you?
BEN: Well, I have to admit we blew the budget a bit last year. We actually spent around $2.8 trillion.
SUZE: Holy crap! Tell me about your debt.
BEN: For the past few years, we just haven’t been able to make ends meet. Like everyone else, our healthcare costs have sky rocketed. We have education costs, operating costs...And I have to admit, even though we’re strapped, we indulge every once in a while. Like on a nice bridge in Alaska for a couple mil. We can’t be expected to always deny ourselves, right? But then we ran into an unexpected a war a few years ago and it really set us back. To tell you the truth, we’re actually kind of struggling with the interest payments now. Combined, we owe about $9,397,126,707.00.
SUZE: Hmmmm. What about savings? You do have an emergency fund to cover three to six months expenses, right?
BEN: Er…uh…not exactly…
SUZE: How about retirement? Any Roths or 401k?
BEN: We do have social security, but it is a bit tenuous…
SUZE: Alrighty, Ben, I have all the info I need on this one. I’m going to have to say…Denied!
BEN: Aw, man.
SUZE: What’s next?
BEN: We’d like to loan about $100 billion to banks. They’ve run into a bit of a crunch, too, and I’d really like to help ‘em out.
SUZE: Why do they need this loan? And most importantly, are they good for it?
BEN: Well, they were a bit irresponsible and got themselves into this mess and I have to say I'm little peeved that they even asked. You think they woulda seen this coming! They had all the numbers on those crazy subprime loans, so this shouldn’t be a surprise, right? I mean, a few years ago they were making money hand over fist, so at the very least, they could have socked a little away for the next downturn. It is a loan though and I’m sure they’re good for it. Banks are pretty solid, right?
SUZE: As long as it's not going to Bear Sterns, ha ha! I’m sure everyone else is completely solvent. Well, I have to say this is a tough one. I’m going to have to say…Approved! Only because without banks having access to cash, the world market may plummet. No one’ll have any money to buy anything and I’ll have to cancel the show. Next?
BEN: I’d like to buy a fleet of planes form Airbus.
SUZE: And what’ll those set you back?
BEN: They will run me a pretty penny. Some estimates are at the $100 billion mark.
SUZE: This may seem off-topic, but humor me for a minute. Airbus is in France, right? And we could just as easily drop the $100 bil at Boeing. Wouldn’t that ultimately be a better investment? Let’s look at the cold hard facts, here Ben. Give the contract to Airbus and that’s money out the door. Keep the contract in the states with Boeing and it’s a buttload of money for the economy. That’ll be…what? 40,000 estimated jobs we could create at a time when we're losing jobs by the second? That’s revenue you could be generating that you desperately need to start paying off those debts!
BEN: Yeah, but…
SUZE: I’m sorry but you are…Denied! It’s just a dumb purchase decision all the way around. You guys are just going to have to do what the rest of us do when times are tight – make do with what you have. You’re just going to have work your way out of debt and get some savings reserves before you make those discretionary purchases.
BEN: But…
SUZE: You need to get serious about tackling that debt. This means getting rid of every single optional purchase until that debt is gone. You may even want to consider getting a part time job to up that income for a while and throw all at the highest interest debt you have. And you definitely need to stop with the Starbucks and the premium cable channels. You know what, Ben? I’m gonna do something I never do for any of my callers. I’m going to give you my book The Laws of Money: 5 Timeless Secrets to Get out and Stay out of Financial Trouble. You definitely need it. Well, thanks for calling, Ben.
That’s all the time we have for today. Remember – people first, then money, then things.
What do you think? Is there a better screen for what we can and can't afford as a nation?
