Do you find yourself getting a little tired of the debt ceiling debate? Of the petty haggling and positioning of politicians? And of the deficit-spending, multi-trillion dollar debt, and the let-future-generations-pay-for-it mentality?
Why don’t we get it that the real problem is not the debt ceiling, it is the debt itself!
America’s “raising our debt ceiling so we can pay for our current obligations” is a little ridiculous isn’t it? To borrow more and more so we can pay the interest on our ever growing debt---does that make any kind of sense?
Isn’t it analogous to a family that goes into their bank and asks “Could you just raise our credit limit on our cards so that we can pay the interest on our credit card debt?” A good bank would say “no, why should we let you increase your debt to pay interest on the debt you already have? That would just exacerbate your problem.” The bank might work with the family to help them budget and meet their payments, but if that proved impossible, they would not bail the family out or offer them a stimulus package. They might just have to let the family resort to bankruptcy because, you see, that family is not “too big to fail.”
Our current congress and this administration is certainly not a good bank. Instead of forcing America to pay down our debts and live within our means, they seem to think that the way out of debt is to borrow more. They think it is better to print more money than to stop run-away spending and balance the budget. Our whole country, even its news institutions, is just way too oriented to spending and to borrowing. As I am writing this column the commentator on CNN is bemoaning the recently reported statistic that Americans are, because of the economic uncertainties, beginning to save more. “So this will really bring down the economy” the commentator says, “People don’t have enough confidence to go out and spend. The problem with more saving is that it will bring about less spending and therefore less money being lent and less business expansion and slower growth.”
What has gone wrong with our thinking in America? When did we decide to build our whole economy on debt? How have we let ourselves fall into this entitlement trap where we think we should have everything we want, right now, without waiting; and where our country outspends its revenue every year and inevitably ends up leaving the debt to our children to pay?
And here is the more personal question: Is the same kind of debt-oriented thinking affecting our most basic institution of the family? Of our individual homes? Of our household finances?
When we ask young people how much their cars cost, they don’t know. They just know how much their monthly payments are. They know what the minimum payment amount is on their credit cards, but they don’t pay much attention to the total credit card debt they have accumulated. They are more worried about a low credit score than about a low (or negative) bank balance. A recent study showed that American thirty-somethings think that personal debt is a status symbol. The bottom line is that they have developed the habit of living on and thinking in terms of credit! Of spending before they earn. Of instant gratification. Of being governed by their wants rather than their needs.
The forgotten alternative of actually waiting for something, of saving, of delayed gratification, of putting away a little until it accumulates to the level where they could buy something without credit has not occurred to them! It is well depicted in a Saturday Night Live parody where Steve Martin plays a husband in a skit, sitting down with his wife to try to tackle their debt problem. Someone shows him a book called “Don’t buy stuff you cannot afford.” Martin is totally confused “But what if you want it but just don’t have the money?” The idea of not buying something when you really want it seems completely foreign, almost un-American to him. (see http://www.hulu.com/watch/1389/saturday-night-live-dont-buy-stuff)
The skit is funny, but what is not very funny at all is that we have a whole generation of spend-first-pay-later parents who are indulgently raising kids who develop a total entitlement attitude which destroys everything from their motivation to their gratitude. We are laying little, personal entitlement traps for our own kids!
So is it possible for your family to succeed where America is failing? Yes! Absolutely! But you have to avoid a lot of the things the government is doing and do many of the things the government is not doing. Don’t give kids so much money and toys. Make them earn their spending money. Teach them budgeting and savings. Don’t bail them out when they run out of money. Set up a family bank where they can save part of the money they earn. Have a system where they can, if they are responsible and accountable, earn enough to buy their own “stuff” rather than asking you for it. Make them work and save and wait for things that they think they want right now.
Spring the entitlement trap and get it out of your house. And enjoy the purging process! Elementary and Middle school age kids are flattered by responsibility and will be complimented by the fact that you think them capable of earning their own money and making their own purchases and choices.
And, come to think about it, maybe that is how we will save America—one family at a time!