A Real Moral Hazard
The moral hazard. An ever so fine line between good fiscal policy and encouraging poor financial decisions.
I’m not talking about anything the Feds are doing right now with Fannie and Freddy. I’ve got a personal twist that I am willing to share with you all. Perhaps you can shed some light to my actions. Am I really a bad person or am I simply a victim of my own rampant curiosity?
It all began one Saturday at work. I was working because my supervisor had a special job for me to do and I needed to make up some time anyways due to my vacation plans for the year.
While taking a trip to the water cooler for a much needed drink I saw, out of the corner of my eye, a stack of papers on a co-worker’s desk that looked, familiar. Upon a closer inspection, my suspicions were confirmed. It was a credit report.
Now who among you would have, given the opportunity, NOT have peeked through? The temptation was too much for this soul. Not only did I steal a glance, I took notes!
Not to do anything nefarious mind you. I was just curious. Deathly curious. It was if I believed it my right to rife through another man’s financial details. I knew I would not be caught and my actions speak volumes of my character. I couldn’t help myself. Not then and certainly not now.
The Dirt
It seems as though my co-worker, who I have mentioned before is in a pickle. I had heard inklings of it in the past but looking through his records was a confirmation of my worst suspicions.
He has over $45,000 in student loans. While he does have a Master’s degree to show for all of that debt, I will very soon be making as much as he does now. He has a combined $80,000 on credit cards. I’m sure that most of them are at horrible interest rates. The final icing on the debt cake is a house bought during the peak of the housing boom financed by a combined $420,000 of debt.
A Terminal Case
Even with an engineers income, I am sad to say that that sort of debt level is a non-recoverable case. How can you bounce back when you are over half a million dollars in debt in your mid thirties? Even if he turns his life around tomorrow I can guarantee that he will never have more money in the bank than my wife and I will since we started our lives without credit card debt and with clear financial goals.
The moral hazard thickens. Should I do something? Try to help? Or is it none of my damn business. Should I let him sink or swim in his current fiscal quagmire?
I wish everyone in life simply followed the same set of rules when it came to money. While not everyone will be a multi-millionaire living the high life, we can all afford to live comfortably and not have to deal with a financial disaster in our thirties.