Are you terrified of economic trouble?
By J.J. Jackson
One thing that many Americans, and even people around the world for that matter, fail to do is plan for hardship. They get complacent. Times are good so they take every dime they make and then some and spend, spend, spend. They fail to save. They fail to think about reality. This is made even worse by so-called promises by government that they will take care of you if something happens.
When the "safety net" exists people take bigger risks than they normally would or even should. If you think about it like a high wire at the circus would you, as someone that has never attempted such a stunt if you didn't have a net under you? Probably not because odds are that you would be in for a world of hurt.
It is the same thing with American society and the economy. Government promises us everything from money in our retirement to food stamps, to money for housing to paying for our medical bills. And that means that people take risks that they shouldn't.
They spend every spare dime on a home when they could have bought one that was less expensive and saved some because they don't have to worry. They have Social Security funded by the working class.
They sit back keep looking for "something better" when they are unemployed because, well flipping burgers is beneath them and besides there is a nice government unemployment check coming in the mail that covers the necessities.
They run out and buy a new car when their old one was only four years old, ran fine and which they still owed several thousand dollars on. They ultimately pay more for that new car than it worth because they are forced to wrap that debt into the new loan payment instead of making sure they have some cash to fall back on if they get laid off for a couple months.
They run out and buy a 50 inch television to replace their 43 inch television. They run out and buy a whole new dinning room and living room set because they wanted a change of pace while their old furniture was perfectly good. They book an expensive two-week vacation cruise to Hawaii when they don't have the money to do much more than take a weekend trip to the beach. They buy their children all sorts of new toys for Christmas when we all know that more than half of them will be taken out of the box once and never played with again.
They go into debt doing all this. The "cha-ching" of money changing hands has been replaced by the "swipe" of a credit card. And why shouldn't they? There's a huge "safety net" just waiting to catch them when they fall.
Now, don't get me wrong. There is absolutely nothing wrong with buying on credit. Nothing wrong, that is, if you can pay it back and are willing to accept the risk that if you can't the bank may come a knocking. And I'm not suggesting that the economy is going to enter a depression either, but that fear is out there now and smacking a lot of people who never considered saving a dime right in their faces.
But if you run out and put $20,000 on plastic and promise the lender 15.99% in interest a year and plop a pair of car loans on top of that and are committed to nearly $1,000 each month in debt payments what happens if something bad happens? What if that depression comes? What if you lose your job? Can you make the payments? Di you even think of that?
If you got caught in the housing bubble after buying up three properties that you believed you could renovate and flip but haven't been able to sell and are carrying $2,400 a month in mortgage debt what now? Will you lose everything you thought you would gain and then some because you over extended yourself?
Did you think two, three, four or even five steps down the road? Did you apply the basic math skills you learned in grade school to figure out what would happen if your income were hampered or if your plans didn't quite work out? Multiplication, addition, subtraction and division are the only skills you need to do these calculations. It's not like you need to construct complex differential equations.
Some might say that such problems like I described above is a problem with consumerism, an often derisive term hurled by people that don't like other people spending money in a way they don't approve of. I do not. Personally I find nothing wrong with consumerism. Consumerism is what keeps our fellow man employed.
If people didn't buy and "consume" goods can you even imagine how high our unemployment rate would be? Could you imagine how high the crime rate would be as those who were unemployed because others didn't demand goods and services take to breaking into your house just to feed their families?
No, it's not consumerism that is bad. What is bad is irresponsibility. It is irresponsibility when combined with consumerism, greed, vanity, want for what others have because you think you'll gain status if you do, and so on that causes the problems. And that irresponsibility comes from child like attitudes that certain segments of society never outgrow.
When you were a child you didn't have to work. You might have had chores to do and gotten an so that you could buy some luxuries, but as a whole someone else provided you with your clothing, food, shelter and other necessities of life. There was little risk that your actions would cause you not to have these things no matter what you did. They just appeared when mommy or daddy came home with bags, swiped their plastic cards at the store or under the tree on Christmas morning.
Life was good then. Wasn't it?
But as we grow up, we learn that life really isn't like that. Or at least life tries really heard to teach us that. And while some people live in their parent's basement until they are forty and continue to have things provided for them by their parents, most people eventually get out into the real world. And in the real world we quickly learn that to pay the mortgage you better get a job.
But it seems that our desire to just have things magically appear that we want or need is hard to over come. Especially when a small piece of plastic makes your wishes come true. Got $100 to your name? Not a problem. You've probably got a credit card with a balance big enough to buy a big screen television. Magic!
Of course then reality overcomes this magical world where everything just appears. Those bills start rolling in for everything bought on credit and which you aren't paying down any balance on. But the child in some of us still wants more. The child in some of us still wants stuff to magically appear.
And the future? Heck, who cares about saving for the future? The government sends you those nice pretty little statements each year telling you how much money they are going to give you once you retire right right? The government tells you that they will take care of your medicine and medical care when you are older right? If you don't make enough money the government will give you food stamps to put food on your plate right? If you lose your job the government will send you a check for a couple months to help you out right?
Yeah, so who cares about the future?
The answer is you should because the government doesn't have a magically money tree down in Washington, D.C. Nope. But you're paying many of the taxes you do today, assuming you are part of the productive class, because there are people in America that think there is. And in the future if you are one of those people that have a hardship that results in a government check you'll be asking others to pay taxes for your benefit as well. Not directly, and not politely but at the point of the government's gun should they refuse.
But what you should really ask yourself is what happens if a massive depression does come. What happens if mass unemployment becomes the norm? Who is going to pay the taxes then? And where will the money come from?
But if you had planned, if you had saved just a little bit, if you had lived within your means you wouldn't need to run to the government with your hand out like a little four year old begging mommy for a candy bar in the grocery store check out line. You wouldn't have to be worried about what if there aren't the tax dollars to cover the benefits government claims to promise. But you're never going to be able to plan for your own future until you start having a healthy fear for that reality and what horrors the future can bring.
I am not saying panic. I am not saying stuff every penny you make under your mattress. I am saying that we all need to be more realistic and stop believing in magic, fairies, little plastic cards that can grant our every wish and the mythical money tree and understand that times are not always good and they are not always bad economically.
Either that or you can just hope and pray that you can make all those debt payments no mater what and really hope and pray that those government subsidies of your future that you are counting on will still be there. I for one don't have that much faith in government because I have studied history.
But government will try to convince you otherwise with a check.
J.J. Jackson is a libertarian conservative author who has been writing and promoting individual liberty since 1993 and is President of Land of the Free Studios, Inc. He is the lead editor of Conservative News & Opinion – The Land of the Free and also the owner of The Right Things – Conservative T-shirts & Gifts (http://www.cafepress.com/rightthings). His weekly commentary along with exclusives not available anywhere else can be found at http://www.libertyreborn.com