$cared $hitle$$

From the New York Times: Economy Fitful, Americans Start to Pay as They Go.

For more than half a century, Americans have proved staggeringly resourceful at finding new ways to spend money.

For the 34 million households who took money out of their homes over the last four years by refinancing or borrowing against their equity — roughly one-third of the nation — the savings rate was running at a negative 13 percent in the middle of 2006, according to Moody’s Economy.com. That means they were borrowing heavily against their assets to finance their day-to-day lives.

By late last year, the savings rate for this group had improved, but just to negative 7 percent and mostly because tightened standards made loans harder to get.

Only in America would a change in savings rate from -13% to -7% be viewed as a "good thing".

Fran Barbaro has an M.B.A. and a résumé of computer industry jobs with salaries reaching $150,000 a year. She used to have a stock portfolio worth about $1 million. She hung original art on the walls of her three-bedroom house in Boston.

But divorce, illness and motherhood drained her savings. Her home is worth less than she owes, and she owes another $200,000 to credit card companies, banks and tax collectors.

Ms. Barbaro, 50, said she knew she was living beyond her means. But her house demanded work. Her two boys needed after-school programs running $25,000 a year. Medical bills multiplied.

“These were simple day-to-day expenses,” she said. “The money was always there.”

Until it wasn’t. Her take-home pay is $5,200 a month, but her debt payments reach $4,400.

Ms. Barbaro has rented out her house while negotiating to lower her mortgage. She has moved to an apartment, where her sons sleep in the lone bedroom while she sleeps on a pull-out sofa.

“It’s the worst,” Ms. Barbaro said. “How do you salvage what you have and hopefully go back?”

You don't. You're screwed, bee-yatch!

“People have come to view credit as savings,” said Michelle Jones, a vice president at the Consumer Credit Counseling Service of Greater Atlanta.

And this, of course, is the problem. When did the debit side of the balance sheet be seen as a "good thing"?