Try Losing Some Debt For a Change.
Have you ever wanted to throw a brick at your TV? No, not the one with the rabbit ears that won’t work in a few days anyway, I mean your shiny new 42” flat panel LCD HDTV that you swiped from Circuit City just before they went bankrupt. No? Well, I have. I’ve actually heard some people on TV say that Americans should “go out and spend for the good of the country!” Every time I hear such nonsense I get the urge hurl a large blunt object right through the center of the screen. If I wasn’t anxiously waiting for the new season of Eastbound and Down I might actually do it. Where is the Kenny Powers voice of reason when you need it?
How Soon We Forget
What these idiots seem to have forgotten is that a major reason that we landed in this recession is that we spent more than we earned and borrowed more than we could afford. Let’s put this in context.
- In the 70s and 80s the savings rate in the U.S. averaged about 10%, meaning folks saved 10% of their after tax income.
- In 2005, the savings rate dipped into NEGATIVE territory for the first time since the Great Depression
- The savings rate was a paltry 1.8% by the end of 2008.
- The rate has since gone up to about 4%, but that still means that 96% of your income is flying out of the window!
Come on people! Are we silly enough to think that spending more money is the way to get out of a problem that started by spending too much money? That’s kind of like suggesting that the cure to your terrible hangover is to down a few more shots of Patron first thing in the morning…right after you hurl. Absurd, right? [Read more...]