I am over 100K in debt and I don't know what to do

[TwixVoy]

I still have probably about another 100K available to me in unused credit card lines, and my credit is AAA rated so I am sure I can manage a few installment loans as well. The amount of income I bring in is dwarfed by my debt load, and there is no chance in hell I can pay anything more than the minimum payments as it stands.

I don't produce a damn thing anymore. 70% of my existence is based on consumption via debt with out producing ANYTHING.

My plan is to tap the remaining credit lines I have to SPEND my way out of debt. Also some good banker friends of mine swear up and down if I just give them some cash from my credit line they'll help me out! The only problem is if this plan doesn't work my good friend in China who has lended me all this money is going to come and break my legs. My good friend in China has also noticed a store I have created - with the initials WM - to sell his cheap plastic crap isn't doing so hot anymore.

Is my plan sound? Has anyone else ever spended their way out of debt before? Please tell me you have!

Sounds like any PLACE you know? We are up shit creek with out a paddle folks.

[fed_up_mother]

1. You forget one thing. You can't print money and create massive inflation.

:)

[TwixVoy]

2. Sure I can

I have 100K in credit lines. When I pull from them I am pulling cash out of my ass that never existed until today.

[John Q. Citizen]

6. see, deflation is the current worry, so causing massive inflation might balance out the

deflationary pressures.

Then once inflation actually takes hold, it allows us to pay off our debt in inflated dollars so we end up paying far less.

We did this to pay off WWII bonds back in the 70s. Inflation is a very welcome thing if you owe money.

[TwixVoy]

7. Oh shit I take that back!!!!!!!!!!!!!!!!!!!!!!!!!!

I just got word my friend in China is getting a little sick of my borrowing. WTF do I do if he cuts me off?

http://www.nytimes.com/2009/01/08/business/worldbusiness/08yuan.html?_r=2&ref=world

[Hannah Bell]

14. China = US capital. Don't buy into the illusion.

[Uzybone]

3. Your kids are also hungry and need vaccines

do you incur more debt to take care of them?

[peacebird]

4. we are in a deathspiral - people aren't spending because they fear losing their jobs, and

more jobs will be lost because people aren't spending. Compound that with the tax-revenue losses suffered by the States, which forces them to cut services (jobs).

Unless a huge jobs creation program is started this self-reinforcing negative spiral will drive our entire economy into the ground.

Once the job situation improves and we start to get back on track, then we can work on reducing the deficit. Clinton & Gore managed to get Ronnie RayGuns massive deficit turned around, I trust that Obama can fix gwb's as well tho probably not until his second term.

[pnwmom]

5. All the major economists on the left and center, including Nobel prize winning

Paul Krugman, agree that a giant stimulus package is needed now.

This isn't like Household Budgeting 101.

[TwixVoy]

8. Are you a true bush believer or something?

Not trying to be rude, just pointing out just how naive you sound.

Did you trust bush when he said this was just a "mild slow down" and nothing to worry about over a year ago? Did you trust the media when they told you we would be all sunshine and roses "come summer"? Remember that?

Did you trust the media/bush when they told you the stimulus checks would fix everything? Even though they didn't do jack shit?

The problem is we are in massive debt at ALL levels. Corporate, PERSONAL, GOVERNMENT, ALL LEVELS FOLKS. No one has the freaking cash for a massive stimulus package to start the cycle again this time. Except our friends in China, and if you look at the link I posted you'll see they are thinking about cutting us off. Then what?

http://www.nytimes.com/2009/01/08/business/worldbusiness/08yuan.html?_r=2&ref=world

[HughBeaumont]

19. So the obvious solution then is to give up, send 1/3 to 1/2 of the country out of work. . .

. . . create mass starvation, have giant die-offs, turn America into a giant two-class peonage . . . and hope someone who has the power to create jobs becomes benevolent to get things going again.

I see.

Or, we can do the correct thing, which is tax the wealthy NOW (not in 2010), put a .03 -.10 percent tax on all trade transactions (which Wall Street and the investor class won't bat an eyelash at), severely reduce the Pentagon's 800 billion dollar-a-year IV, end their pointless, go-nowhere wars, legalize industrial hemp, start funding for infrastructure instead of prisons, executive bonuses and wars, institute a maximum wage, start fishing out all Madoffs on Wall Street and indict and imprison everyone involved in all financial scandals of the past 20 years.

Or, 138 million of us with nothing to lose could rise up, invade the homes of the criminally corporate wealthy and force them to play ball under threat of death.

Which sounds like the most plausible scenario of the above?

Because I gotta tell you . . . this much wealth inequality is one of the reasons we're IN this damned mess in the first place. We have Reagan and the two Bewshes listening to the likes of Martin Feldstien, Phil Gramm, Milton Friedman and Hayek to thank for that. When economic systems turn countries 1/2 the size of the US into depleted nations with massive unemployment and economic turmoil, what did anyone think it would do to the supposed most powerful nation on earth?

We cannot just give up.

[pnwmom]

26. It's Rethugs making your argument. The ones more conservative than Bush.

Liberal economists, such as Krugman, are saying the opposite.

[Tangerine LaBamba]

9. Psssssssssst.......

It's "spent," not "spended." Fix it and look even smarter..............

[TwixVoy]

10. No it's intentional

to reflect the genius of the idea. I'm sorry it was lost on you.

[Tangerine LaBamba]

11. An error to .....

Sorry, but I don't get it. I just thought you don't know better.

The whole post was so simplistic, the "spended" thing fit. But, obviously, you had a greater point to make.

It was lost on me, yes.

[xchrom]

16. it was lost on anyone who is smaterer than the OP. nt

[Tangerine LaBamba]

18. HAHAHAHAHHA!!!!!!!!

:toast:

[Kajsa]

15. Well,

It looks like an attempt of a non existent conjugation of the verb.

This one didn't work, imho.

[hileeopnyn8d]

27. I'm curious

So, what is YOUR idea to get us out of this mess?

[Madison knows]

12. Money is just the way we keep score. You may be down, but you are never out of it.

[mmonk]

13. A very sound plan! Make sure your currency isn't worth anything.

:thumbsup:

Can you print some more? We'll call it a growth economy.

[Cessna Invesco Palin]

17. Oh, Wal-Mart is doing just fine.

It's the one bright light in retail at the moment. Everyone else is fucked, though.

[TwixVoy]

21. Think so?

Stay on top of the news: http://articles.moneycentral.msn.com/Investing/Dispatch/market-dispatches-010809.aspx?icid=dispatch_090108

[Cessna Invesco Palin]

22. Sorry, no.

I'm not going to worry about what Wal-Mart stock did on a particular day when they've reported INCREASING sales for the whole of 2008. Considering how many mid-size retailers are now trading in the red, there's really no comparison. Wal-Mart missed their numbers. Big deal. They're still expanding and still profitable, which is more than you can say for a lot of other retailers.

[TwixVoy]

23. Wow you have your head in the clouds

The article I linked to wasn't about wal-mart stock, but an unexpected decrease in sales and miss of sales goals during the 4th quarter. So much for an increase in all of 2008 huh?

[Cessna Invesco Palin]

25. Well, gee...

When you send me an article entitled "Dow falls 27 on Wal-Mart's miss"

And said article immediately goes on to say:


In fact, Wal-Mart Stores, down 7.5% to $51.38, was the key reason that the Dow Jones industrials lost 27 points to 8,742 today. Wal-Mart's swoon subtracted 33 points from the blue-chip index.

And then...

Wal-Mart shares fell after it missed big on its December same-store sales numbers -- a result a weakening economy and bad weather. Sales grew 1.7% at stores open at least one year, well below the 2.8% gain analysts had expected. Last month it forecast that sales would rise between 1% and 3%

I can't possibly imagine how I might have come to the conclusion that despite problems with Wal-Mart's stock price, they were still profitable and expanding.

[creeksneakers2]

20. I'm against the stimulus package too

But its unfair to compare it to an insane plan to get out of debt since the point of the stimulus is NOT to get us out of debt.

I do believe that by sucking out all the money needed to finance the stimulus we are robbing the very investment pool that would have brought back economic recovery.

[northernlights]

24. if you blindly spend, you're right

you are screwed.

But if you follow my 5-step plan to financial freedom:
1. downsize your lifestyle by, say, cutting out the daily Starbucks coffee and trading in your beemer for a scooter or bike
2. sell off your useless sh*t, even at a loss, and use that cash to pay down debt,
3. rent out a room in your home to a student and use that cash to pay down debt,
4. give up your personal trainer and get your exercise by planting a garden so you don't spend as much for packaged food,
and use that cash to pay down debt, and
5. borrow and *invest* in, say, education, to get a much better paying job,

then you will ultimately be able to pay down your debt.

(BTW, your AAA credit rating will get you low-rate, interest paid by gov, loan payment deferred student loan)

As far as your lender from China, his workers are rioting because they've been laid off because nobody is buying their sh*t. So he will lend you money, probably with some serious strings and your serious plan, in order to save himself.He certainly won't break you legs because then you won't even make minimum payments.

It will be a long, hard slog. But life is much, much better with fresh strawberries and without the Starbucks. You'll see.

[ReverendDeuce]

28. You like Mexico?

Cash out. Max them cards out and cut and run to Central America. $25K can afford you a nice fresh start.

[MazeRat7]

29. Money makes money....

you can't "spend" your way out, but you can "invest" your way out. Spend a couple of months learning how the options markets work. If your smart, have good business sense, and an idea amount where "things" are going you might just make some much needed cash. Downside... options investing is really risky. You can loose your ass. Upside, its the best way to make money given a limited amount of initial investment.

Think about it. I've supplemented my income for many years doing just this. I do know that I could survive without a job doing nothing more than investing. However, it takes a toll on your person. Its hard work, way harder than a 9-5 gig. Trust me on this.

Peace,
MZr7