I have a confession to make. I'm not terribly unhappy that the United States economy is in the doldrums, possibly even headed into a depression. I am unhappy that Congress and the president are planning to send millions of dollars as "rebates" to Americans.
The reason I'm not unhappy is that Americans have been spending more money than we have over the past decade. We have been living literally on money borrowed from foreign nations such as China. Our savings rate is depressingly low. The gap between rich and poor is distressingly great and growing each year.
In spite of historically high oil prices we continue to drive massive, gas-guzzling trucks and SUVs and to build our houses with little thought to energy efficiency. We have become addicted to heating our houses so warm in winter that we wear T-shirts in January and we cool them so much in summer that we're forced to wear sweaters in July.
Our parents thought that a 2,000-square-foot house with one and one-half bathrooms was the culmination of the middle-class dream. Today we want twice the space, twice the number of bathrooms, and a spa and media center thrown in for good measure. We are living in an economic fairy tale.
It's easy to blame the present subprime mortgage crisis on the bankers and securities dealers. But, like drug dealers, they were only able to do the damage they did because millions of Americans demanded housing they couldn't afford. Credit became the middle class drug of choice during the past 10 years. And most of us became addicted. Now, we are accustomed to living with high credit card balances and home mortgages we cannot afford.
Our government in Washington, a Republican administration that was supposed to be fiscally conservative, has been spending borrowed money without any regard as to how and when it can be repaid. Now, facing a presidential election this same government is sending millions of Americans checks. Are they telling us to use these so-called "rebates" to pay off our debts? Absolutely not. They are telling us that we must do our patriotic duty and spend that money to get the economy going again. Instead of paying off your debt, they say, buy a new car or stereo. What insanity is this?
In my opinion, if the United States is going to continue to prosper, Americans need to stop spending money irresponsibly, pay off our debt and adjust our economic goals to be rational. And it wouldn't hurt one bit if we stopped buying imported goods and started buying American products.
Why shouldn't the president say that it's patriotic to buy American goods? Why not tell Americans that if they must spend their rebates, spend them on American-made products? As the dollar loses value, foreign goods become more expensive. To switch our buying habits to favor American products is not only patriotic, it's smart.
I don't want to see Americans hurt by a recession, but I fear that unless we, as a nation and as individuals, begin to act in an economically conservative and rational manner, not spending beyond our means, we are in for far greater problems than the recession which now looms over us.
So, my suggestion is a simple one: When you get your "rebate" check in the mail, don't spend it. Pay off debt, if you have debt. If you don't have debt, invest it for the future. That way, you'll have some money put away for the next time things get a bit rough financially.