by Caitlin Kenney

David G. writes from Rome:

Forgive me David Kestenbaum, for I have sinned. It has been 32 years since my last confession.

I am writing to you from Rome, Italy. The crisis is so bad I can't even afford to call in to your show. I hope you don't mind a confessional email.

Living only a few miles from the Vatican, I feel I should be brutally honest with my confession or be struck down by a renegade motorino. It turns out I have a lot of financial dirty laundry to air (and no oversized Maytag dryer to ease the burden).

I have lived and worked overseas for the past 9 years with my wife and three kids. After thinking a great deal about our role in the current financial crisis, I am now convinced that we single handedly caused the current economic depression faced by our great country.

 

My confession starts back in 2000 with the sale of our home outside Washington, DC at what we thought was the height of the real estate bubble, Although we only lived in the house for 3 years, we actually turned a small profit on the sale. Even with the recent housing collapse, the current owners would be lucky to get triple what they paid for our place. It breaks my heart to think of their misfortune.

As Americans who live and work overseas, we are entitled to a sizable overseas income exclusion. I fear this loss of this tax revenue for the US government could have provided much needed funds for addition bank, insurance or auto industry bailouts. It is however somewhat strange that we pay more taxes now living abroad with the overseas exclusion on one income than when both my wife and I worked and lived in the US. It must be all the services we receive while abroad, like friendly TSA security searches at the airport and passport renewals done right at the embassy.

Afraid of not having a foot in the real estate bubble, we decided to buy a vacation home toward the end of 2006. Like the cheapskates we are, we underbid the asking price on the property that had more than doubled in value since the owner bought it in 2002. Much to the seller's astonishment, we also insisted on a home inspection and asked to be credited for items that did not function properly, like the heat and air conditioning.

We probably committed our biggest sin when our mortgage broker convinced us to pay a slightly higher interest rate and fee for a no doc loan. Living overseas and working for a foreign employer makes the whole credit check process a bit sticky he explained. So we went ahead with the no doc loan and put 20% down for a 30 year fixed mortgage. The broker begged me to do an interest only loan, but I didn't have the heart. I fear I am responsible for his business going under.

I must admit that I am also guilty of saving far too much for our retirement and kids' college education. In addition to funding IRAs for my wife and I, we also contribute to 529 college savings plans and Education Savings Accounts for our children. As my returns on these accounts over the last 12 years have risen to the level of my contributions, I only wish I had had spent the money on something more permanent, like a bigger flat screen TV or a Hummer. I could have done my part to save GM and Circuit City if I wasn't always thinking about the future!

So, that's it. If living within your means is a sin, than we are guilty. I wish I could describe how good it feels to get all this off my chest. Maybe this is what irrational exuberance feels like? As an act of contrition, I promise to rush out and buy the Halo game Trilogy and play 10 times, so help me God!

To share your own confession, call Planet Money's apology line at (202) 371-1775.