July 15, 2009 - CHANGE IS NOT ALWAYS GOOD

I am going to share some things about my life that I really don't want to but feel that it is necessary to get everyone's attention who are not seriously worried about this economy.

Although I am basically a Republican at heart, I voted for President Carter, who was President from 1977 to 1981. Why did I vote for him? Because we had just come out of a bad experience with Nixon and the "Watergate" scandal. Although Gerald Ford took over and reigned until 1977, the negative impact of Nixon's presidency lingered on. I was like everyone else and I wanted a "CHANGE" in the government.

Carter was extremely charming, had a great smile and could make wonderful speeches. He was like a "breath of fresh air" to our country. We were certain that he would make a "CHANGE" for the better in our government. Does this sound familiar?

Carter made a "CHANGE" alright...he stood by and allowed the interest rate go out of sight, higher than it had ever gone before in history, which impacted me and my family's life dramatically.

Back then, it was according to which group you fell into as to whether you were happy with the Carter administration. The examples below are only two of probably a thousand ones, but they will hopefully make my point:

1) My dad was a plant worker and his job remained stable throughout the Carter administration. He never had a lot of debt and had some money in the bank. He absolutely loved Carter because the money in his saving account doubled and he was thrilled. The only impact he felt was when he tried to buy a car, he was unhappy with the interest rate quoted to him. Fortunately, he did not have a mortgage on his house. If he had had a variable rate mortgage on his house, like many people did, it would have went up dramatically and he would have felt more of an impact on his life.

2) My husband was a builder of residential homes. Although he custom built some homes, he also built some of his own to sell. When he built a house for someone or some of his houses sold, that was the means in which he generated income. In 1977, when Carter went in, we owned a 5,000 sq. ft. home, three new vehicles, and had a small amount of money in the bank. We only kept a small amount in savings because it took a lot of money to run the business. EVERYTHING WE OWNED WAS PAID FOR AND WE HAD NO PERSONAL DEBT. We had very little debt in the business but when someone runs a business, they usually have some on-going debt generated for the business to function.

Times were very good for my family prior to 1977. Like today, we could not believe that anything really bad could happen to us. What could possibly happen? Everything we owned personally was paid for and we were set for life. We intended to retire in that house. In fact, life was so good that I entered nursing school in 1977, thinking everything was "okey dokey." By the time I received my nursing degree in 1979, our world had "gone to hell in a hand basket."

During this time, my husband kept building houses, thinking that the interest rate would surely go down and not up. It had never done that before! The banks must have felt the same way because they kept loaning money to most of the contractors, even though the housing industry had come to a screeching halt. Note: This also affected building supply houses, carpet suppliers, furniture dealers, construction workers, etc.

All contractors borrow construction loans from the bank to build their homes. When the homes are sold, the construction loans are paid off and the remainder is the "income" generated by the contractor. My husband's homes had always sold on a fairly regular basis, generating a good income for our family, and he was considered to be a very successful contractor.

What I hold against Carter is that he "allowed" the interest rate to climb to unheard of limits. Why didn't he do something? People had stopped buying houses. My husband's income stopped coming in but his outgo began to triple. When a contractor borrows a construction loan from a bank, they charge them the prime rate plus 2% and all of the loans are variable rate loans. Briefly, at one point, the interest rate on all of my husband's construction loans hit 23%. During most of Carter's presidency, the rate hovered around 16-18%.

(Note: Carter was rich before he went into office. It can be assumed that he had tons of money in banks and other investments. What was his incentive to lower the interest rates? He was living "high on the hog" in the white house while his money was doubling/tripling.)

My husband had about a dozen houses with variable rate construction loans on all of his houses. Everyone was waiting on the interest rate to come down before they bought a house. My husband's astronomical outgo continued, eating away at all of our assets, including our personal ones that we had to put up for security. We felt as if we had been hit by an economic tsunami.

By the time Carter was voted out of office, our lives were in complete shambles. I am only telling a small portion of the story. We found ourselves living in pure hell. We had lost practically everything. NO...CHANGE IS NOT ALWAYS GOOD.

By the grace of God and plenty of hard work, once Carter was out of power and the interest rate improved, we worked our way back to an acceptable standard of living. I now live in a very nice house, have no mortgage, vehicles are paid for, no debt and a small amount of money in the bank. BUT...it has not been easy! What I have found out is that God will not do it all, but if you are willing, he will assist you in obtaining your goals in life.

Now, maybe you can understand why I try to be somewhat of a "political activist."