Who Is the Spendthrift?

homeowners' lamentHere is our national debt: $13,000,000,000,000. That’s way too many zeros for us to really understand such a number’s significance. It doesn’t help to write $13 trillion, either, because we are just getting comfortable with the concept of a billion. I still find it hard to imagine a life in which someone owns a billion dollars, so I can’t yet grasp a trillion.

To get that deep into debt, our government has been spending like a drunken sailor for years: buying everything in sight without thinking about the future. Every year government payouts far exceed income, and the yearly deficit keeps growing. Conservatives are outraged by Washington’s profligate use of taxpayers’ money. Those spendthrifts in Washington need to take a lesson from the American family, who knows that you can’t spend what you don’t have.

At least that’s what we have been hearing, louder and louder, with more and more anger. But it isn’t true.

I certainly agree with the characterization of our political leaders. They have so zealously been filling national budgets by supporting unnecessary earmarked projects at home, that just eliminating earmarks entirely is no longer sufficient to deal with the fiscal crisis. It’s the claim about the American family’s budget that’s bogus.

It may be a colossal coincidence, but American families also are $13 trillion in debt, more or less. American families have been spending money they don’t have for so long, and with such lack of concern for the risks, that millions have come to depend on the fantasy of ever-increasing real estate prices. For many people inflation was not a fear, but a hope. They would be able to pay back their debts only if their salaries and the value of their homes kept multiplying. Inflation is always the debtor’s friend.

As much as people have been critical of Washington’s spending, the current economic crisis was caused by our own budgetary mismanagement. When the real estate boom turned out to be a house of cards, people’s debts came due much sooner than they had expected. Governments are much less to blame for the current foreclosure crisis than homebuyers, egged on by unscrupulous bankers.

Even if the federal government miraculously cures its overspending problem, the biggest threat to our national financial security will remain: us. It is the American family which needs to stop spending what we don’t have, what we can only imagine having under the most optimistic future conditions.

We won’t get any help from the “free market”. American businesses depend on our deficit spending, as well as on the government’s. They not only push products at us from morning ‘till night, advertising things in every way possible. They also try to shove more debt down our throats. More than once a week, every week, my family’s mail includes an offer to get a new credit card. The American family is finally saving at a reasonable rate for the first time in decades, and economists tell us we have to spend more to get out of this recession.

I think we need to spend a lot less. It might be easier than you think. Consider our national garbage heaps, overflowing with last year’s purchases, last week’s packaging, and tonight’s leftovers. Consider the cancerous growth of the ugliest buildings on the American landscape, the storage centers, where the American family puts away all the junk that it can no longer pretend will ever be useful again.

Steve HochstadtWhen we cut the waste out of our household budgets, we should have no trouble eliminating our personal deficit spending and bringing the total household debt back down to manageable levels. Only at that point can we point to our representatives in Washington and say, “Take a lesson from the American family.”

Steve Hochstadt

Steve Hochstadt of Jacksonville is a professor of history at Illinois College. His column appears every Tuesday in the Journal-Courier and is available and on his blog at stevehochstadt.blogspot.com.

Published by the LA Progressive on November 17, 2010
Related Posts Plugin for WordPress, Blogger...
About Steve Hochstadt

Steve Hochstadt is professor of history at Illinois College in Jacksonville, Illinois, and author of Sources of the Holocaust (2004) and Exodus to Shanghai: Stories of Escape from the Third Reich (2012), both from Palgrave Macmillan. He writes a weekly column for the Jacksonville (IL) Journal-Courier and blogs for the History News Network. "His latest work is presented at www.stevehochstadt.com."