It’s time to enjoy the upside of the credit crisis. As Washington scandals go, this one is strictly G-rated. Unlike the excesses of the 1990s, the current debacle doesn’t make you turn off the radio whenever national news is broadcast in the presence of youngsters. And rather than trying to prevent certain phrases from seeping into dinnertime conversation, you’d actually be thrilled if your kids could use “credit default swap” in a sentence.
There’s a teachable moment here: “Should we spend money that we don’t have?” I put this question to the peanut gallery gathered at my breakfast table. Laughter all around from the under-10 set. OK, I was leading the witnesses.
But further study with a statistically insignificant sample of one 7-year-old suggests that piling on too much leverage is not instinctive behavior. My son Neal was skeptical of the idea that he could buy the things he wants by borrowing. “Why would I do that? I want my own money.” He also wondered who would want to lend to him.
What a great article! It aims at the future and posits the real reason we do all this work, investing, and borrowing – the children.
I especially took note of the following line:
“But further study with a statistically insignificant sample of one 7-year-old suggests that piling on too much leverage is not instinctive behavior.”
I try to use this concept when teaching as much as I can, such as, “How many young girls dream of growing up to be prostitutes?” I can’t believe that any do. But we humans adopt to the frustrations and disappointments in life in very poor ways if we don’t have God and a good plan. Such is also true with our finances. It is true with spouses. It is true in our worship of God. It is true with any virtue.
Don
“There’s a teachable moment here”
Yes, indeed, and kudos to James Freeman for recognizing it.