Debt Solution for America’s Seniors

Last month there was an alarming article in USA Today that says according to AARP, 600,000 senior citizens are either delinquent or in foreclosure on their homes. A separate report by AARP found that 25.5 million seniors age 50 and up still carry a mortgage on their home. This puts America’s senior citizens at risk because unlike younger workers, many seniors are on a fixed income and lack the money or job opportunities to catch up on payments when they fall behind.

On top of that, thirty-six percent of workers age 55 and older say the total value of their household’s savings and investments — excluding the value of their primary home and any defined benefit plans — is less than $25,000, according to the Employee Benefit Research Institute.

Seniors have their backs against the wall. They are on fixed incomes. Their homes have lost a significant amount of equity, especially if they live in popular retirement states like Arizona, Nevada, California and Florida. Even if they have retirement savings, they have most likely lost half of it the past 12 months. Most of them are suffering in silent default.

If people could step outside themselves and look at their own situation (and the situation of everyone else) from a nearby, third party vantage point, they would see that they are not the only ones who are suffering. They would see that most people are in some kind of financial pain. They would see that they are not alone. They would realize they are not just one lone voice suffering in silence. They would understand they are one voice in a chorus of millions that has not yet recognized that they have all the power. They, as individuals, have all the power, and always have. It’s just that they have been conditioned out of convenience to delegate that power to others. To their trade associations, special interest organizations and elected officials. That’s not working.

At one event I recently attended, it was suggested that now is the time for America’s senior citizens to demand from AARP, their elected officials and any other group who is supposedly working on their behalf to stop all foreclosures now. Make it illegal to foreclose on a person’s home for a minimum of two years. Stop all interest and penalties until the financial crisis clears. If everyone with a mortgage had a two-year mortgage holiday, savings could be accelerated and stress could be eliminated. Payments would resume in 24 months. Sound pretty far out? Perhaps. But not when you consider the tens of trillions of dollars already allocated in loans, guarantees, bailouts and direct investments.

We are six months into a political administration that ran on a universal theme of change. Where’s the change? People are suffering and our elected officials are only concerned with the Fed, the Treasury and the financial entities that facilitated the cause of this calamity. Enough is enough. The president could sign an executive order today that would help the people tomorrow. But that is not happening. It appears any token assistance the people are to receive will be doled out next summer when the crisis has accelerated, people are desperate and politicians can scrape some political gain out of this mess before the 2010 election. In the meantime, everyone is left to fend for themselves.

If you’re thinking we cannot afford to do such a thing, think again. Back when the loans, guarantees, bailouts and direct investments in the financial entities who created this mess were only about 10 trillion dollars, at that time, according to a Bloomberg article, we could have paid off 90% of the nation’s home mortgages.

Maybe a 24-month debt holiday isn’t such a far-fetched idea after all? It would have an immediate impact for the average person. Most of the people who are suffering financially were not reckless at all. They are people just like you who have lost their jobs (jobs that are not being replaced). They are honest, hard working citizens of this country who have been victimized by an out of control financial system.

When someone’s arm is cut off and they are bleeding out, what do you do? You put a tourniquet on their arm to stop the bleeding, prevent death and you call 911. But what happens when the 911 operator tells you that relief won’t be coming until next summer just before the 2010 election? And what if they tell you that in the meantime, no tourniquets are allowed? If even 10% of our country bleeds out financially between now and next summer, it will decimate the other 90% because the fallout is cumulative and will affect everyone.

The old rules do not apply. Everyone’s financial survival is at stake. The time to act is now. If you stand around waiting for others to do it for you, in the end, they’re going to do it you.