Bluefield Daily Telegraph, Bluefield, WV

Breaking News

Sister Newspapers' Blogs

November 19, 2012

Many lottery winners end up losing it all


Winning the lottery did not help people increase their net worth. They need to have set goals and an understand of finance to make their lives better.

Giving someone a lump sum does not make financial problems go away. It’s like putting an overweight person on a crash diet. Unless you can fix the underlying problem, they are going to fall back to their old habits.

This is true for lottery winner and the average American.

The paper makes reference to a 2007 study in the Journal of Political Economy, which said although “consumers initially used federal rebate checks to reduce debt, eventually debt levels returned to pre-rebate levels.”

Hankins, Hoekstra and Skiba concluded that “while we cannot be sure that homeowners or other beneficiaries of government aid would respond in the same way lottery winners did, the results may warrant some skepticism about the long term efficacy of such a bailout.”

You can see why bailout fail. Wall Street and lottery winners have a common bond. They have access to easy money without restraints.

In my experience with lottery winners, one of the biggest reasons for blowing their money is their family and “friends”.

The entourage hangs on until the money is gone. Once the party is over, they are nowhere to be found.

Wall Street has it’s own posse called Washington. The easy flow of campaign contributions, the revolving door between regulators and those they are supposed to be regulating, and the explosion of well connected, highly paid, lobbyists makes it impossible for Washington to tell Wall Street no.

There has been talk in Washington of another stimulus package. Instead of looking at short term solutions, the country needs to make long term, painful, economic changes.

Otherwise, like the Florida lottery winners, we are going to wind up where we started from.

Or worse.

Don McNay writes for the Richmond (Ky.) Register. CNHI News Service distributes his column.

Text Only
Sister Newspapers' Blogs
Bill Archer
AP Video
Crashed Air Algerie Plane Found in Mali Raw: Iowa Police Dash Cam Shows Wild Chase Dempsey: Putin May Light Fire and Lose Control Arizona Prison Chief: Execution Wasn't Botched In Case of Fire, Oxygen Masks for Pets Police: Doctor Who Shot Gunman 'Saved Lives' Anti-violence Advocate Killed, but Not Silenced. Israel Mulls Ceasefire Amid Gaza Offensive Power to Be Restored After Wash. Wildfire Mobile App Gives Tour of Battle of Atlanta Sites Raw: Protesters, Soldiers Clash in West Bank Israeli American Reservist Torn Over Return Calif. Police Investigate Peacock Shooting Death MN Twins Debut Beer Vending Machine Today in History for July 25th 'Modern Family' Star on Gay Athletes Coming Out A Young Victim's Premonition, Hug Before MH17 DA: Pa. Doctor Fired Back at Hospital Gunman Official: Air Algerie Flight 'probably Crashed' Raw: Ukraine's Donetsk Residents Flee
Greg Jordan