Date: 2008-09-20 10:00 Subject: What A Strange Universe This Is.... Security: Public Location: Taking a stroll through a cottonwool fog.... Mood: curious Music: "Money" by Pink Floyd Tags: debt recovery made idiotic

Can anyone tell me what universe I'm in?

Eighteen years ago, I took a walk on a foggy day.  When the fog cleared, everything was different.  Where I came from, Fanny May was a chocolateer.  Now she sells absurdly-high interest rate quarter-of-a-million-dollar loans to poor people.  (And somehow makes money doing so.)

In the before place, people with a debt they couldn't afford either took a second job to pay it off, or set up a dummy corporation under a fictional name and listed everything they owned as corporate assets, then declared personal bankruptcy.  Here, they petition the federal government to bail them out at no charge.

Where I was, Conservatives believed in fiscal responsibility (you paid your debts, and you didn't initiate new spending until they were paid off).  Where I am, Conservatives (both at local and national levels) believe you can borrow your way out of debt.  (Liberals in both places consistently believe setting up a new tax is the cure to all ills.  Apparently, liberal voters somehow believe that that new tax will be paid by other people, not them.)

On the other side, everyone understood that, if you wanted to keep the odd multi-million-dollar windfall, you put it in the bank, worked for one last year, then quit and lived off the interest.  Here, you win the lottery, you immediately go on a spending spree until you have nothing left (in about 5 and a half months) except debts.  Or, if you do save something aside (like you were some kind of evil conservative or something), a new tax comes along to take it away.

I must be starting to acclimatize, though.  All this hooplah about Fanny and Freddy have got me wondering what would happen if I were to take out a F___ M__ housing loan, then (oopsie, somebody else bought the house while I was doing the paperwork), divert enough to pay 24 monthly payments plus my entire accumulated credit card debt to my checking account, and deposit the balance into savings.

With a principal balance of roughly $187, 000 at 3.5% simple interest, each year would give me $6, 545 to bolster my savings.  Since I'd paid much more than that  keeping the loan alive, I could claim to the IRS and Franchise Tax Board that I'd lost money enough to more than cancel out my interest income.  At the end of each year, I'd roll the  accumulated interest over to a different account so that the numbers would remain stable each year.  After two years, having recovered all the savings that 5 years of underemployment and the downpayment on my current car cost me, I'd pay back the original 187, 000 in one lump, thus reducing my monthly payment to a level that could be supported by my meager monthly income.

And if at some point I got sick and tired of paying that, I'd apply for the Federal Bailout Package and write the whole thing off cold.  See?  I'm starting to think like a native of this universe.

Maybe it's just my other-continuum upbringing, but something at the back of my skull is pleading with me not to go ahead with the above plan.  Is it just fear?  Or is there something I've glossed over?