How do we, Americans, get into this financial mess?

All this mess over Fannie and Freddie and the housing crisis mask the real problem in this country - that's the fact that wages have not gone up for average Americans in a long, long time. The economy has been fueled by consumers spending their supposed home equity, while incomes have stagnated for all but those on the highest rungs of corporate America or pop culture. The average Americans do not know what it is like to have lots of discretionary income in a long time. They only work and earn enough money to make ends meet or to pay the bills. For sure, most would envy the large contracts offered and signed by a few athletes, rap moguls, musicians, and hip hop artists. That is why shows such as American Idol and America's Got Talent will continue to be popular. Lottery enters the mix too. They are a sure way to reach success in this country. All young kids dream about making it big in sports, music or some sort of entertainment industry. When they can not make it, they go to places such as Las Vegas, Florida and San Fernando Valley, Los Angeles to try to make it in alternative adult industries. By then, they may become disillusioned and deceived. Where is the power of hard work, saving and living within one's limits?

What has the recent real estate exuberance taught us as a nation?

During the real estate boom, people used their homes as piggy banks, tapping into their equity to pay off their car loans and their credit card debt and their student loan debt. With home prices dropping in most places (Riverside, California, Florida and Las Vegas, the home equity has dried up. Credit was easy to get and many people went for it. For sure, debts piled up. Now we are a nation of people in debt. We, Americans, are saddled by debts. We are at the mercy of foreign investors who continue to trust in our systems by lending and investing more money to our institutions. Yes, it is a global economy right now. It becomes more important for our leaders to reassure those foreigners who are seeing Americans snaking in long lines and making a run on their banks. God forbid these foreign investors, also fearing a crash, start to pull their money too! While this is going on at the financial institution level, everything is getting more expensive: food, gas, school supplies, textbooks, basic products, even movies are soaring in price. Unfortunately wages are not keeping up. So if people are struggling just to pay for the basics, what are they going to have left over to pay off their massive debt?

This bleak situation we have just described partly explains the foreclosure epidemic that has ravaged local neighborhoods. The brown grass that was once green and immaculate becomes common fixture in most neighborhoods. Show me a neighborhood, a community even the best and richest one, that has not had to deal with unsold houses whose for sale signs have been up for months and years.

Indeed, it is time to return to the basics. We need to manage our finances, save and diversify our funds. The good old days are long gone. The home equity cash register is long gone. In most cases, easy money led to waste and overspending. Credit card offers led to the indebtedness of the American individual. In most cases, they led to excess and overweight. It was a false sense of tranquility and wealth. The foundation was shaky, to begin with.

Now is the time to rethink our ways and start saving and spending what we have, but not what we do not have.