Arch City Tavern

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Richard, Russell, and Julianne were all in town yesterday, and we decided to celebrate the happy homecoming by heading down to the Short North and having lunch in the first interesting place we found.  We ended up in the Arch City Tavern — so named because Columbus used to be called the arch city because it featured lots of arched lights over its main streets — and that was a happy occasion, too.

It was about noon, so there were two crucial lunch decisions to be made.  First, heavy or light?  It was a hot day out, so I went for a choice on the lighter side, with an arugula, fig, prosciutto, and goat cheese pizza.  It was excellent, and had a particularly delectable and crunchy crust — which any pizza aficionado knows is a crucial element of the entire pizza experience.  So far, I was one for one.

Second, beer or no beer.  It was a holiday, sure, but noon is pretty early for me.  I took a chance and ordered a Monk’s Cafe Flemish Sour Ale.  It was so good I promptly had another.  It had an excellent tart taste that went well with the hot weather, and it really held its own against the goat cheese.  So, I was two for two — or perhaps three for three, since I had two of the beers.

I’m going to be on the lookout for places that sell the Monk’s Cafe by the six pack.

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Living On The Card

The Wall Street Journal reports that, sometime this year, the collective credit card balances for Americans will hit $1 trillion.  That’s just shy of the all-time record — $1.02 trillion — that was reached in July 2008.

We all remember what happened after July 2008, don’t we?  Subprime mortgage defaults soared, the housing market crashed, Wall Street firms toppled, and the American economy stood on the brink on catastrophe.  Credit card debt wasn’t a primary cause of the Great Recession, but in those tough times many American families recognized that owing too much money wasn’t particularly prudent and they needed to change their ways.

antandgrasshopperOver the next few years, our collective credit card balances declined steadily, and then stayed flat for a while.  Lately, however, they’ve been moving up again, and the trend lines are unmistakable — people are using their credit cards more and are carrying larger balances on them.  Auto loan balances, too, are at record levels.  The WSJ reports that much of the growth in collective credit card balances has come because banks have been reaching out and marketing their cards to subprime borrowers.  (There’s that troubling subprime word again.)

Any financial advisor will tell you that racking up substantial, long-term credit card debt isn’t a good practice, and that people would do better to set budgets, establish personal savings to provide a cushion against unexpected costs, and live within their means rather than borrowing for nonessentials.  Americans aren’t very good at that, however, and they’ve got short memories.  When you combine the mounting credit card debt with the declining savings rate in America, and then you read stories about how almost two-thirds of American families couldn’t handle an unexpected $500 car bill or a $1,000 hospital bill, it makes you wonder whether we’re on the brink of another big economic problem.

Why are Americans like the grasshopper in the tale of the ant and the grasshopper?  One of my retired friends who enjoys light reading about behavioral economics says that discipline views it as a combination of a desire for immediate gratification and a kind of paralysis in the face of potential financial problems.  He notes that even when Americans take courses on basic personal financial concepts and thoughtful planning, the lessons just don’t sink in, and the old bad habits remain.

At some point, however, the piper needs to be paid.  People who live from hand to mouth, with maxed-out credit cards that require large monthly payments,  might avoid complete disaster and make it to retirement, but with it’s not going to be the retirement of their dreams.  Without any personal savings, and with only Social Security to fall back on, they’re looking at “golden years” that are distinctly grim.  There’s a reason the grasshopper in the tale usually ends up in a threadbare coat, begging for a handout.