Pay Down Your Debts

In a recent article that was published on-line, the writer expressed opinions on the future state of the American economy. The thrust of the article was either a sadly pessimistic review of our economy or a hidden believe that the American economy, by its own efforts, may well be able to survive the Obama era.


Three points were raised. The first was that commercial interest rates just could not go any lower. This reference is to the official rate of interest that is charged to business entities by the "big" banks and upon which the actual interest rate to consumers is predicated. This interest rate has been at almost zero for months and will stay that way for several more months. In reality loans to individual businesses and to individual citizens are not readily available because of the reluctance of the banking industry to extend credit and particularly at such a low rate.

The second point was that the American government has limited sources from whom it can borrow money. Our federal government's biggest creditors, such as Communist China and OPEC, have stopped "investing" in the Obama administration. If no money can be borrowed by Obama then there is a limit on what can be spent by Washington.

The third point was with the Federal government's economic stimulus efforts being over, the American economy will soon be on its own. The expressed belief was that this would be initially an economic pain for the nation but could well be the foundation for positive news in a year or so.

Unfortunately, even more recent information has indicated that a majority of the individual American States are in terrible condition financially. The top ten of this debtor classification includes California, Florida, Michigan, Illinois and New Jersey. The bottom line of this particular report was if you have money available, pay down your debts.