It's no secret that tens of millions of Americans are in
debt to the tune of close to $10,000 dollars of credit card
debt, and I just was asking myself how it all came about,
when I came across an article about California's debt
problems, and I was shocked.

I knew of course that California was in bad shape
financially, but I had no idea just how bad, and it would
be hard to overstate its fiscal problems.

If California Were A Person It Would Be Bankrupt

The present shortfall in California's budget is $42
billion, and yes you read that right, billion and not
million, and a billion is a thousand million.

I just checked the population of California, and the latest
figures put out by the census bureau were 36,756,666 (try
to ignore the 666 because it's must have changed by now),
which means that every man woman and child would need to
pay around $1,100 to cover the shortfall.

To cover this shortfall, the legislature enacted a package
that included the largest state tax increases in American
history, leaving California with the highest sales and
personal income-tax rates in the country.

* Hawaii overtook California in May.

That Was The Good News

The state is now paying for goods and services with IOUs
and California's fixed pension obligations are estimated at
$300 billion or nearly $8,000 per man, woman and child, and
this year the Treasury will put America itself another $1.4
trillion in debt, and nervous foreigners are now asking for
higher rates of interest.

So Are Americans Addicted To Debt?

Since it's not just individuals in America that are staring
bankruptcy in the face, but most states and the country
too, it might be reasonable to ask if Americans have become
addicted to debt, and I purposely wrote "debt" and not
spending, because spending is not bad, but getting into
debt is, if you don't have the wherewithal to repay it.

The Oxford English Dictionary defines addiction as,

"The state of being addicted to a habit or pursuit; esp.
the state of dependence on a drug to the extent that it
cannot be withdrawn without adverse effects".

Are You Honestly In Control Of Your Spending?

A person with an addiction doesn't think about the long
term, because if they did then they wouldn't gamble or
smoke, or do lots of other things like taking on new debt
whilst having no idea as to how it would be repaid.

Maybe the first thing that you need to ask yourself, is if
you can control your spending, and then ponder what AA
(Alcoholics Anonymous) has told alcoholics for years, "If
you need to control your drinking then you're an alcoholic".

Put An End To Impulse Buying

If you really want to get out of debt, then impulse buying
would seem like the first thing to get under control, but
that can be hard.

The most obvious way to prevent impulse buying is to make a
list of things that you need, with the emphasis on "need"
and only buy things on the list.

The addicted mind plays games though, and an ever present
quandary for the addicted will be seeing a special offer
that seems to too good to miss, and feeling that buying it
will ultimately save money, and is therefore justied.

If you succumb once in a while, and the effect is minor,
then don't be too hard on yourself, because reducing debt
resembles losing weight and if you're too hard on yourself
then you'll fail, but if the purchases are major or
obviously too frequent, then take note and return to your
list.

Denial Is The Worst Thing

If you're addicted to spending, then take a look in the
mirror and admit it to yourself, because denying it will
only make things worse.

Make a mental note of places that cause you to spend money
that you don't have, and don't go to them.

If it's your local shopping mall then avoid it, and if you
want to go there with a friend, then only take enough money
with you to buy a coffee or a snack.

And if there is honestly something that you need to buy
there, then simply withdraw enough cash from your local
bank to make the purchase, and leave your credit cards
behind when you go there.

If the thought of carrying out the above advice sounds
awful, and you can't imagine following it, then you're
clearly addicted to debt and need to come to terms with the
fact right now.

Losing your house or car will make you miserable too, and
life without them will be more than "difficult", and having
debt collectors phoning and knocking on your door isn't a
whole lot of fun either.

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The author of this article was a film producer, and award
winning film sound editor for many years. He has long been
interested in finance and economics, and one of his
websites -> http://home-loan-help.org has a large number of
very popular articles about the world's economy in general,
and bad debt loans, debt settlement, debt consolidation,
and bankruptcy in particular.

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