I know it's probably un-American to say this but this rush to give taxpayers $600 of their own money -- borrowed from their own tax refunds next year -- is exactly one of the reasons why the perception of the economy is trouble, trouble, and more trouble.
Just why are we tanking? The subprime mortgage crisis is a big reason, say the experts, with a half-million Americans losing their homes to foreclosure and more to come in 2008. What we're paying lip service to is that banks didn't do their jobs making sure the loans were repayable and the borrowers (that'd be us, folks) didn't quite grasp the American Dream actually had to be paid back. The lenders were the crack dealers and the consumers were the crack addicts.Whatever happened to "if it sounds too good to be true it probably is?" or is that just the postscript on Better Business Bureau news releases?
The answer from Washington doesn't really ding the lenders and the scores of high-paid subprime geniuses who likely cashed in on huge bonuses during the greed-glory years, although the sinking stock prices are a nice reminder that stockholders still hold the bag. The answer isn't a call for a financial come-to-Jesus for consumers to wake up and realize adults do have to pay attention to the fine print and you really shouldn't expect to get something for nothing. The solution marked bipartisan: borrow from next year's taxes so people think they're getting a gift this year. You are likely excited at the prospect of hundreds of dollars by summer but as that check lands in the mailbox remember it's your money, so a couple of ideas ahead of the splurge:
YES, America is now a consumer and service economy but the health and welfare of Best Buy, Wal-Mart, Sears and Macy's really isn't more important than your own economic health. Instead of making the plasma screen your top priority (thereby increasing the trade deficit) how about making your personal deficit a higher priority and paying down some debt? Not sexy, not as much fun but a better way to improve your personal finances in the long run.
SURE, consumer spending is important to jump start the economy but consider for a moment going to the grocery store, paying utility bills, making needed home improvements to improve the value of your home and maybe even taking those college classes you've thought of but couldn't afford are also "consumer spending", but a far better investment in you than in Sony, Panasonic, and Toshiba.
SPENDING isn't a bad thing as long as you use smart think; would you buy that big-ticket item if you didn't get the $600 bucks and more importantly is it a question of want or is it a question of need? We've gotten to the point where American society is being defined by what we're buying instead of what we're doing and that's a step toward the Pax Americana signaling the beginning of the demise of the U.S. era.
It won't be a sudden overnight event; it'll take time, and the slide will be in cents rather than dollars until we wake up and find the banks all run by someone else overseas. Buy into the dealer's argument that we need the drug to keep the neighborhood alive and the only one who prospers is the dealer, and even then without the customers in the long run he won't have much of a future. Blowing our own money in a gigantic consumer spending orgasm this summer is a down payment not on a stronger economy but just a momentary fix until the next pangs of hunger strike.
