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Letters 03-02-2015

American Exceptualism Rudy Giuliani was espousing his opinion to Fox News that Barack Obama did not love America and didn’t brag enough about “American Exceptionalism.”

Fur Is Not Chic When my 25-pound dog stepped in a toothed steel leg hold trap a few ft off the trail, I learned how “unchic” fur is. I had to carry her out two miles to get to a vet.

Which Is More Dangerous? Just a couple of thoughts I had in response to the letters by Gordon Lee Dean and Jarin Weber in the Feb. 23 issue. Mr. Dean claims that there have been zero deaths from the measles in the past ten years.

Real Action on Climate In “Climate Madness” in the Feb. 9 issue, the writer points out that scientists are all but unanimous and that large numbers of people agree: global warming poses a threat to future generations.

Real Science Wolfgang Pauli, the Nobel Prize winning Austrian-born theoretical physicist, was known not only for his work in postulating the existence of the neutrino but feared for his razor-edged humor.

Home · Articles · News · Features · Remember Christmas Clubs
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Remember Christmas Clubs

Harley Sachs - December 22nd, 2008
Some readers may remember Christmas Clubs -- a way to save for the holidays all through the year that has disappeared in recent years -- soon to become a forgotten tradition.
When I was a kid my mother set up a little account at our local bank which was called a Christmas Club. Starting in January, each week I made a small deposit of about 50 cents. When December came around I accumulated $25 I could spend on Christmas gifts.
Christmas Clubs have long since disappeared. Obviously, banks found the administrative costs of entering all those 50 cent deposits to be too expensive. Of course, as the year progressed, they had more and more money from savers like me that they could lend out at interest to cover the administrative costs.
Aside from being a method of providing us savers with money to spend come Christmas time, the real benefit was it encouraged us to save. A Christmas Club savings plan conditioned us to put money aside for the future. It reinforced the idea of postponing gratification, an essential discipline which has since been lost.

SCROOGED OUT
There are no Christmas Clubs now. They were done away with and replaced with credit cards and the fatal practice of demanding instant gratification. Instead of encouraging folks to save, which provided the bankers with money they could lend out at six percent for mortgages, they invited people to open credit card accounts which carried with them interest rates that began around 12 percent on the unpaid balance. The cards were soon available to more and more people as bankers persuaded the government to do away with usury laws.
Usury, for those who never knew or forgot, is the practice of charging exorbitant interest. States once set that limit, which was about eight percent. Now if you fail to pay your credit card on time or miss a payment entirely, the banks jack up that interest rate to as much as 30 percent -- as high or higher than the loan shark rates of gangsters.
With easy credit, people demanding instant gratification bought stuff on those cards. Estimates of the current average household credit card debt range from $10,000 to $40,000. My brother barely has enough left over from his meager income to pay the minimum balance each month. At that rate, he will never be out of debt. Never.
In the olden days, if you wanted to go to college, which in my time cost $800 a year, and you didn’t have the money, you got a part-time job or stayed out of school for a year while you saved for that tuition. To encourage more college attendance, the government set up a low-interest student loan program. Unfortunately, this has been handed over to banks and the interest is no longer low.

REVERSE DOWRY
My grandson’s girl friend, currently a junior in college, already owes $100,000 in student loans. Her estimated monthly payments when she graduates will be $800. I don’t have the amortization tables at hand, and don’t know the interest rate she’s being charged, but you can bet that if she lives long enough to pay off that student loan the final sum will be more like $150,000. This might be called a reverse dowry: marrying someone who brings with them a lifetime of debt.
Of course, college today costs roughly $40,000 a year, depending on the school. It’s an outrageous expense few families can afford.
No wonder our economic balloon has burst. Living on credit is unsustainable.
Imagine: saving up the money first before buying something! When I was writing for the trade journals in Europe I did a story about Moebelpfister in Switzerland. That company had a program by which an engaged couple would save up money in a joint account so that when they finally married they had built up a nest egg to furnish their first home with, of course, furniture from Moebelpfister. That was Switzerland, of course, where they had a different attitude toward money and savings. It’s going to take a huge attitude adjustment for us spend now, pay later Americans to return to the mental state we had in the days of the Christmas Club.

 
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