Twenty-something years ago I was made responsible for the billing and collection activities of my employer. At the time we had about $600,000 of bills outstanding to our customers. Some of those bills were over a year old, and the odds of collecting on any of them was virtually nil. So I sat down with my boss right after Christmas (we were on a January-December accounting year), studied the list of outstanding accounts receivable 90-days-old and over, and began selecting accounts to be written off as uncollectible. The offsetting account we charged those dollars to was called "Bad Debts."
This act was an admission on our part that our salespeople had sold services to people who either never could or never would pay for those services. (Before you ask, of course no salesperson was ever chastised about qualifying a lead; silly you for thinking of it.) No rational person would ever have thought about taking on the collection of those accounts; most of the people whose name was on those accounts could rightly argue it was nothing more than a continual running of the monthly membership dues meter long past the time when they'd stopped using our facilities.
So when I learn that the Bush Administration is suggesting that you and I be the buyers of hundreds of billions of dollars of bankers' bad debts, I'm skeptical that you and I are ever gonna get any return on this deal.
It may or may not be the right thing to do for the poor schmoe who can't pay his ARM after his monthly payment has doubled, but don't try to sell me the idea that we're gonna get any return on it.
Posted by Linkmeister at September 19, 2008 09:00 AM | TrackBack