Everyone that I know is against my position on this and I don't care because AMERICA, YOU ARE NOT BEING SMART! We are 7+ trillion dollars in debt, and running a budget deficit this year of another trillion dollars. We are borrowing money from the Chinese and the Russians. And then spening a billion dollars a month in Iraq! This is an impossible financial situation. The reason for this economic slowdown is simple. The world economy is held up by the American consumer. The American consumer relies on credit to buy the world's goods and services. I've said it time and time again Americans are in pain and one of the ways that they soothe that pain is to spend. Credit is just a nice name for debt and the American consumer is now tapped out. We had decades of economic prosperity based on Americans spending themselves into debt. Now the cloak is thrown off and the problem is correcting itself. Banks that were carefree in lending to high risk borrowers, are now out of business. Automakers that were producing more cars than they can sell, are now out of business. People who bought houses that they couldn't afford, are now being put out of them. Companies that had more employees than profits are now laying off. Those who were underqualified for their jobs are now being put out of work. Inflated home prices are coming down. Retail is being forced to cut its margins. The stock market which hit ridiculously high levels is now slowed down to would have been normal growth. The problems are correcting themselves. The American bubble has burst and no amount of money that the governement wants to put into it will reinflate it. Americans are going to stop spending themselves into the hole and start saving as they did this past Christmas season.
My point? The government is drowning future American taxpayers in debt. And honestly the next generation is not going to pay for it. They'll refuse and what will that mean ? War with China? Oh, I know that there will be a stimulus package on the table. But its a bad idea, especially because it has no chance in hell of stimulating an economy back into false prosperity.
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For many decades, I wondered how my coworkers could afford to take two week vacations to Maui; own a house, a car, and a boat; wear shoes that cost more than my monthly rent. . . .
ReplyDeleteThen it hit me. Credit cards. See, I've never had one. (Just debit cards.) Any time I buy something, I have a few choices:
--Pay for it out of my bank account, if there is enough money, and if that leaves me with enough money for everything else.
--Put away money in a separate account to save for it.
--Put it on layaway.
I think you are so beyond right. Not only have people gotten themselves into terrible debt, but for what -- an IPOD; an Iphone; $600 tote bags; $900 shoes; vacations to luxury resorts where the people who wait on you support their families on $1.10 an hour; cars they can't drive because of the price of gas; McMansions that are hard to heat and even harder to resell.
Felt good to get that off my chest. Really enjoy your posts. Looking forward to talking to you in class.