Bailout doesn't stop some Coloradans from cutting back
Associated Press
Published October 5, 2008 at 2:19 p.m.
From postponed trips to changing spending habits and new jobs, the troubled economy has changed Coloradans' lives in ways big and small.
Denver Public Schools secretary Bernice Adolf, 56, and her husband once spent Friday nights eating out at the fast-casual chain Chipotle Mexican Grill, or at places with happy hour specials. Now they fix meals like spaghetti at home and then go for a walk.
"We're trying to save wherever we can," said Adolf, of Wheat Ridge.
This year, the couple decided against a trip this year to Rawlins, Wyo., to visit family. She remembers being able to book a hotel for two for $57 a few years ago, but prices are around $87 now, she said. Gas prices also are up, so a trip will have to wait until she can save some money.
"I have license plate renewals coming up. Food's gone up too," she said outside Albertson's, where she went to take advantage of a $1 sale on several items Friday.
Even shopping habits have changed. She likes eating salad greens, even though it's more expensive than lettuce. "You have to pick and choose what food you want," she said.
U.S. home prices are down, unemployment rates are rising, lending has tightened and the government has had to step in to aid ailing financial giants. Last week, President Bush signed a $700 billion package aimed at preventing a further free fall and freeing up credit so people can buy homes or cars.
It might not be soon enough to keep commission-only car salesman Chris Henderson of Greenwood Village from switching jobs.
By this time last year, Henderson estimates he had earned at least $70,000. His last paycheck for 110 hours of work was $449.
Last spring, he and his wife downsized from a 4,000-square-foot home to one that is 2,500 square feet. Henderson, 40, said he is unwilling to sacrifice the education of his 3-year-old daughter, who attends a private preschool that costs about $1,200 a month.
Now he is considering putting away the suit and tie and becoming a commercial truck driver.
He praised the dealership where he works but said there's little bosses can do for employees when customers are reluctant to step on the lot.
"They tell us, 'Hang in there.' We've been hanging since summer," he said.
"Americans aren't raised to work to be broke. You work to raise your family. They say ride it out. I don't choose to destroy my credit and go into debt to do it," Henderson said.
In Lakewood, Dori and Steve Starr are closing Dori's Quilts and Lodge Furniture because of slow sales. A sign inside says: "Thanks W for driving us out of bidness. Where's our part of the $700 billion bailout."
"Our main thing we sell are log beds and quilts," Dori said. "When you're thinking your house is worth less than you paid for it, spending money on the house — it doesn't cheer you up."
Steve Starr called the bailout an abomination. "It certainly isn't helping us. We're the ones who are hurting," he said.
Construction company assistant superintendent Paul Rak insists business in Denver is still good for him. He has been flipping properties on the side with hopes of retiring at age 62.
"I thought I'd go into early retirement, but it ain't gonna happen," said Rak, 54. "The way the country is going right now, it looks worse for me at 62 than 54. Better spend what I have now because the investments might not be worth a penny when I get there."
He recently bought a used Hummer by trading in his truck and putting down $8,000 more. Though he still puts extra money toward retirement, he's decided to enjoy life today.
"If I'm going to work 'til I die, I'm going to work until I die, but I'll have a Porsche and Hummer in the driveway," he said.
There may be a bright spot. Summer scooter sales were strong at Sportique Scooters in Englewood, where store manager Ray Kite estimates sales over the last two to three months are up 70 percent for scooters that can get 80 miles per gallon.
"Everyone likes the idea of saving where they can," he said.
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October 5, 2008
4:07 p.m.
Suggest removal
Buckwheat writes:
Been cutting back and doing without all summer.. Now that my 401-k just took an azzzzwippin' I'll probably die on the job before I get to retire..Well at least my kids will get my life insurance..
October 5, 2008
4:28 p.m.
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anya writes:
It's funny how bush has perverted the United States. It's best for the country if we all spend like crazy and run up credit card debts. It best for us if we pay off our loans and credit and just live on cash. In other words, what's best for the USA is not what's best for its citizens.
Oh well, as long as bush and his pals have good health insurance and lots of cars and homes, that's all that really matters. This guy is the worst president ever.
October 5, 2008
4:39 p.m.
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Nobama writes:
I hate "news reports" based upon anecdotal stories. They prove nothing! I could report on any issue and support it with selected anecdotes designed to back me up. If "cutting back" means living within one's means, then I'm all for it. The alternative is what has gotten this country into the financial mess we have now. And nobody, e.g. anya, can legitimately blame Bush for this lack of personal fiscal discipline anymore than any other public official.
October 5, 2008
4:46 p.m.
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Nobama writes:
anya writes:
"It's funny how bush has perverted the United States. - - -Oh well, as long as bush and his pals have good health insurance and lots of cars and homes, that's all that really matters. This guy is the worst president ever."
What an absurd statement to make. I hear it from Liberals all the time. "It's all Bush's fault. He's a disaster. Worst President ever." What a bunch of emotional crap. How about checking out the "good" factors, e.g., unemployment rate, interest rates, inflation rates, total homeownership, total jobs, and even the stock market and compare them to previous administrations
at those points in time. Sure, we've got some problems, but it's far from a "disaster", or the "worst President" ever. I'm guessing you historical perspective only goes back 7 years. Check out Jimmy Carter's economic stats some time. But, please quit just running off at the keyboard.
October 5, 2008
6:05 p.m.
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Francesca writes:
anya is right about the first sentence though pretty much. How the more credit debt we keep, the better the rating, provided we keep the payments current. Our system rewards those who go into debt, rather than saving and paying for things with cash (I don't mean mortgages, obviously). My business banker told me he had to turn away a couple that where applying for a business loan because they their rating was too low... they had saved cash for previous expenses, including their home, and didn't have enough data showing for a favorable debt repayment history. Ridiculous!
October 5, 2008
7:42 p.m.
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Sundog writes:
I can't wait until the presidential swap. The blame Bush crowd will have to find a new whipping boy. I'm not totally happy with Bush's performance either. He ignored the borders, and so much more, but he is definitely not the sum total of all our problems, and anyone who thinks so is the very definition of a Simpleton, aka a Simp! So keep it up, Simps! You are about out of time.
October 5, 2008
9:22 p.m.
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robbyr2 writes:
"What a bunch of emotional crap. How about checking out the "good" factors, e.g., unemployment rate, interest rates, inflation rates, total homeownership, total jobs, and even the stock market and compare them to previous administrations
at those points in time. Sure, we've got some problems, but it's far from a "disaster", or the "worst President" ever."
This could have been a quote from a Republican in 1930. You haven't seen anything yet.
October 5, 2008
9:33 p.m.
Suggest removal
LockeRobster writes:
"Henderson, 40, said he is unwilling to sacrifice the education of his 3-year-old daughter, who attends a private preschool that costs about $1,200 a month."
Did anyone else think that is just a tad on the absurd side? I could see $1,200 per year for such a preschool, but PER MONTH?!? That's more than my mortgage! I hope that's just a typo or misquote.
Also, go ask any literate economics professor and he or she will tell you that there is ALWAYS a lag where economic policy is concerned. The excellent years under Clinton were a result of the policies enacted under Reagan and continued under Bush, and what we are seeing today is the result of the government-run-amok that Clinton gave us.
You can't turn an economy on a dime, folks.
So what's my personal answer? Pay off debt as fast as I can (including divesting my 401-K and paying off my car and several other debts) and avoid getting into any more. Not saying that's right for everyone, but I think it's worth a try.
October 6, 2008
3:40 a.m.
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roger44 writes:
If you watched 60 minutes Sunday, they told of the loophole the companies found, to get around regulators. Dishonesty, along with consumers going into more debt than they can handle was the problem. The resolution that should have followed the bailout wasn't there, one to let all the rest of the companies know that there would be no more bailouts. I don't see it getting any better unless those in Congress get smarter, and I sure don't see that happening.
October 6, 2008
7:36 a.m.
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FCZ writes:
People and families should live within their means.
Spending less than your earn was learned in the 1930's and needs to be re-learned now.
Same for governments as wild spending eventually will hit the taxpayers and then the taxpayers' kids.
October 6, 2008
7:45 a.m.
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WyoDutch writes:
Beans, Bullets, Bandaids and Bullion... That's where I've been putting a little spare cash for the past few years. Now when I go to the grocery and see how the boxes, cans and bottles are all about 25% smaller in size, but still carry the old price-tags... I pat myself on the back for fulfilling the Boy Scout oath.
Two semi-truck loads of firewood logs in the back pasture along with 500 gallons of gas and 150 gallons of diesel in the bulk tanks will keep the motors turning and the woodstove burning for a long time. The pantry and freezers provide assurance that my family will never have to shuffle along in line for a box of government cheese.
Last year, we bought a new Mercury for the Mrs., putting 50% down and when that's paid off next summer, I'll be looking for a new/used F350 Super Duty that some poor soul couldn't afford to keep up the payments on. And that Yamaha Rhino in the barn... saved up and paid cash for that too.
Nothing wrong with some delayed gratification... fact is, it feels pretty darn good.
October 6, 2008
8:08 a.m.
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Jackieg218 writes:
I think a better idea would have been to hand out a copy of Dave Ramsey's book Total Money Makeover to everyone when they did this bailout. Most people need to wake up and live with in thier means. High speed internet (or dial up for that matter), cell phones, Dish with 19 HBO's, cars that have notes on them etc are NOT living with in your means if you have to use a credit card at ALL during that month to pay for something. I would venture to guess that most (not all of course) working adults dont have 6 months of living costs in a savings account, but they mail out a bill for something un-needed every month like the things listed above.
It's time that people live with in what they make and stop the complaining. Does that mean shopping at goodwill, driving a 1999 car and needing to use a pay phone when out and about rather than a cell phone, perhaps for some. In the long run though, it will feel much better knowing that in the event that you do get laid off with todays economy that you can rest easy knowing that you will be able to handle your bills for 6 months while you find a replacment for that lost income. So rather than jumping in the unemployment lines and filing for foodstamps, you can go on living.
Wake up people and see that we ARE in a money crunch and stop wasting!
October 6, 2008
9:15 a.m.
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Sundog writes:
WyoDutch: And when that runs out?
October 6, 2008
9:50 a.m.
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nobodyman writes:
I really have little sympathy for people who drive fancy cars and own big fancy houses who are now feeling the crunch. Sorry, but nobody forced you to drive an Audi and live in Parker.
October 6, 2008
10:07 a.m.
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nobodyman writes:
"shopping at goodwill, driving a 1999 car and needing to use a pay phone when out and about rather than a cell phone, perhaps for some."
Hey, that sounds like me but I have a cell phone rather than a home phone. Only thing is I shop at goodwill and drive a 1999 car because I want to. Maybe American culture is what needs to change. We're so superficial, and we expect everyone else to be as well. We go through our lives fearing what people think about our clothes, our cars, even which iPod we have. Am I the only one who left that attitude in high school?
Sure must s--- to have a half dozen maxed out credit cards with 29.98% rates because you were trying to impress people.
October 6, 2008
10:53 a.m.
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fifty writes:
Bush is responsible for a large part of this. Just like a murderer can have a nice side, Bush can have a few positive financial statistics though he has nearly murdered the economy.
Bush was unable to provide leadership where leadership was needed. It was evident five years ago that China was booming and was becoming a competitor for limited supplies of steel, oil etc. It was also evident that our trade balance was suffering. Other countries pursued alternative fuels but we couldn't because the Republicans are in part financed by oil companies. Our economy could have grown substantially had the government provided incentives to develop alternative fuels. Alternative fuels were the long-term answer and we probably would not have to look at off-shore drilling at this point in time had we had proper leadership.
The Republicans are all for the people at the top and denying a decent income to the little people, as Leona called them. Greed at the top was allowed to flourish. Estate taxes, which are far less painful than other taxes were reduced for the wealthy. I stand to benefit from this, but I don't think it is fair. The wealthier became wealthier and the poor became poorer. This is very serious when one considers the effect on children who are lacking in basic medical care, adequate nutrition and parent availability. Although the fundamentalist Christians and the Republicans have an ongoing love fest, Jesus would never show up to this party.
The middle class could not cope with its decline in spending power and instead relied on debt to make up the shortfall in income. Now there is not much more debt to be acquired. As Bush was giving tax breaks to the rich, he sank the country into debt. He never balanced a budget and appeared to feel that he could load up the countries credit card for his pet projects as long as he didn't stick the citizens with the bill while he was president. At times it looked like he was developing projects for Haliburton which benefited greatly from contracts in Iraq and New Orleans. It appeared that the goal was to keep feeding Haliburton government money rather than to repair New Orleans or make Iraq function.
Lastly the crash of the real estate segment of the market is due to changes in SEC policy that occurred in 2004 under Bush's watch. These changes were made due to greed in the banking and housing sectors. Leaders in these sectors help finance the Republican party as well. I certainly benefited by these changes as I could only buy my home due to the relaxed credit rules, but the downside is that when positive economic factors turn negative, families lose their homes and the economy collapses in shambles. Creative protective mechanisms needed to be installed at the time the credit rules were relaxed.
The people who voted Bush into office saddled every American with a huge amount of debt.
October 6, 2008
11:18 a.m.
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nobodyman writes:
As long as your post is, it's a simplification of the problem. While I think Bush is at least partially responsible I think overall it was inevitable. The government and our economy is too large for one person to have direct oversight over everything. The Fed, SEC and Wall Street are highly influential pieces of our economy and not presided over by the president- who is also not an economist.
Core decisions were made that accommodated it, but the underlying problem was always greed.