Getting some perspective on the federal bailout plan on clarkhoward.com

Here we are again with another "special edition" of The Clark Howard Show. We don't say those words "special edition" lightly; Clark doesn't do hype.

The reality is that we've painted ourselves into a corner -- collectively. Yes, you're right to be angry at Wall Street, but there's enough blame to go around to us too. Most Americans borrowed money willy-nilly during the past several years, increasing their levels of personal debt 50% in 5 years! Why? Because people gave us permission to borrow and told us we could do it.

Regarding President Bush's speech last night, it was clear he was eating humble pie and it looked painful. He and his team have presented the Paulson plan, and it was DOA because it didn't hold their Wall Street buddies accountable.

The headlines are enough to make a person anxious. Each time a domino fell, Clark has tried to draw perspective and show why it's not doom and gloom. Yet even though there's this bailout deal in the works, the hurt is not over yet. We got into this mess over time and we have to get out over time. However, getting out does not have to mean mass unemployment, homelessness and starvation.

With headlines blaring "crisis" all the time, you lose perspective. Our 24-hour news cycle purposely plays to minute-by-minute ratings to capture your eyeballs. When the coverage ends, we think the problem is solved. But that's not the case here.

We face a federal budget deficit that limits our options. In fact, it necessitates that we depend on the kindness of strangers (aka foreign nations) to buy up our excess federal debt.

So here's the takeaway for you: You can't control the fact that the federal government spends money we don't have. You can only control what you do in your own household. You must spend only what you make. There is no other long-term choice.

Clark's challenge to you is as follows: Rethink how you handle your money, and focus on living within your means.

What others are saying

Moral Hazard
Allowing reward without risk in the system is stepping toward Socialism. And I'm financing this?
By Justin @ 09/26/08 12:30:00 AMreport abuse
Double-dipping
The source of all true wealth is production. Problem is: much of the compensation paid in America bears little relation to productivity, i.e. the production of goods and services that actually improve people's lives.

For example, our family doctor, who practices alone in a single-doctor practice, has three employees just to do his paperwork (e.g. insurance-related stuff). He doesn't even have the services of a nurse.

The assistant superintendent of our local public school district "retired" at nearly full pay at the age of 52 (!) after 30 years of "service" to the community. His salary was $85,000/year not including generous benefits (e.g. 90% of his family's health insurance was paid by the taxpayers). His retirement was not self-funded but funded by the taxpayers. Say that he lives to the age of 82--he will receive literally millions of dollars, paid for by many people who make substantially less who do not receive the benefits. He has taken another taxpayer-financed job during his "retirement," double-dipping that precludes another worthy person from that position.

These sorts of legal, but not productive, scenarios surround us!

Randy Kleine, Milford, OH
By Randy Kleine @ 09/25/08 11:31:11 PMreport abuse
economy crisis
Clark, why have you been so quite about this crisis? you told us 6 month ago don't worry things were going to get better. Clark. I feel the American people have been rape by sublinal adversiting of financial institutions. American people need better direction of consumer education. Clark, we need more educational system on consumer rights. thank-You C.B.
By cindy @ 09/25/08 10:42:34 PMreport abuse
living,and chargin without good sense.
My husband and I live within our means. His car is 24yrs.old,and mine is a 1990. We have often wondered how younger adults live in homes worth half a million and up,and have two 40thousand dollar cars parked in the drive. They don't look to be more than 34yrs. old. How do they do it we wonder? We've worked all our lives,taken on a limited amount of credit,and paid it off every month, With the exception of our mortgage,we are dept free. We are now in our mid 60's,and the company that we worked for for a total of 74yrs. has gone bankrupt. We have lost money in the process. Now with this farce, are we going to be expected to pay for those that lived out of their means,and spent,and charged without any reasonable concern? I'm upset,as should many people who have lived as we have without all the newest,high end cars,and upscale homes. I do hope we don't have to be burdened with all of the bad judgements in regard to credit borrowing,and for those that got themselves in a home that was obviously not within their budget to begin with. Any words of wisdom for couples like us?
By callie @ 09/25/08 10:32:25 PMreport abuse
Going Forward suggestions
We own our home, have savings and no debt. Clark has set an example we try to follow. I would love his thoughts on the road ahead.
By Douglas Scott @ 09/25/08 05:15:26 PMreport abuse

Moral Hazard

Allowing reward without risk in the system is stepping toward Socialism. And I'm financing this?

By Justin @ 09/26/08 12:30:00 AMreport abuse

Double-dipping

The source of all true wealth is production. Problem is: much of the compensation paid in America bears little relation to productivity, i.e. the production of goods and services that actually improve people's lives.

For example, our family doctor, who practices alone in a single-doctor practice, has three employees just to do his paperwork (e.g. insurance-related stuff). He doesn't even have the services of a nurse.

The assistant superintendent of our local public school district "retired" at nearly full pay at the age of 52 (!) after 30 years of "service" to the community. His salary was $85,000/year not including generous benefits (e.g. 90% of his family's health insurance was paid by the taxpayers). His retirement was not self-funded but funded by the taxpayers. Say that he lives to the age of 82--he will receive literally millions of dollars, paid for by many people who make substantially less who do not receive the benefits. He has taken another taxpayer-financed job during his "retirement," double-dipping that precludes another worthy person from that position.

These sorts of legal, but not productive, scenarios surround us!

Randy Kleine, Milford, OH

By Randy Kleine @ 09/25/08 11:31:11 PMreport abuse

economy crisis

Clark, why have you been so quite about this crisis? you told us 6 month ago don't worry things were going to get better. Clark. I feel the American people have been rape by sublinal adversiting of financial institutions. American people need better direction of consumer education. Clark, we need more educational system on consumer rights. thank-You C.B.

By cindy @ 09/25/08 10:42:34 PMreport abuse

living,and chargin without good sense.

My husband and I live within our means. His car is 24yrs.old,and mine is a 1990. We have often wondered how younger adults live in homes worth half a million and up,and have two 40thousand dollar cars parked in the drive. They don't look to be more than 34yrs. old. How do they do it we wonder? We've worked all our lives,taken on a limited amount of credit,and paid it off every month, With the exception of our mortgage,we are dept free. We are now in our mid 60's,and the company that we worked for for a total of 74yrs. has gone bankrupt. We have lost money in the process. Now with this farce, are we going to be expected to pay for those that lived out of their means,and spent,and charged without any reasonable concern? I'm upset,as should many people who have lived as we have without all the newest,high end cars,and upscale homes. I do hope we don't have to be burdened with all of the bad judgements in regard to credit borrowing,and for those that got themselves in a home that was obviously not within their budget to begin with. Any words of wisdom for couples like us?

By callie @ 09/25/08 10:32:25 PMreport abuse

Going Forward suggestions

We own our home, have savings and no debt. Clark has set an example we try to follow. I would love his thoughts on the road ahead.

By Douglas Scott @ 09/25/08 05:15:26 PMreport abuse

Listen Live:

Clark On Demand:

Clark's Advice:

Consumer Action Center:

Quick Links:

Clark Media:

Call The Show:

Sep 25, 2008 -- Getting some perspective on the federal bailout plan

What others are saying