Restoring America – Part I
Could it be we were rescued from an economy that was simply an illusion? Just in time to get our act together?
Total household debt – mortgage, home equity loans, auto loans and credit cards – rose from $4.6 trillion to $12.5 trillion from 1999 to 2008. Stop and take a look at the chart, which depicts total household debt from 1999 to 2010.
What’s wrong with this picture? For starters, consumer spending traditionally accounts for 70% our economy. With a 272% increase in household debt from 1999 to 2008, it is obvious consumer spending prior to the crash was largely financed by the credit bubble. If we focus on paying off our debts, which is the right thing to do, how long will it take for spendable cash from jobs and earnings to replace spending that was previously financed? Contemplating the answer to this question should startle you.
Our economy was an illusion financed by the banks and spurred by consumption beyond our means. The resulting economic crisis, which may take decades to resolve is actually good for America, because it might have saved us from an unsustainable path just in the nick of time. Perhaps we’re being rescued moments before going over the falls.
We should have been talking about this years ago – but most probably wouldn’t have listened. C.S. Lewis once said “God whispers to us in our pleasures, speaks to us in our conscience, but shouts to us in our pains: it is his megaphone for a deaf world”. Did not our conscious whisper to us when we racked up those credit cards? Did not our conscious whisper “how are you going to pay for this”? Did the collective conscious of government officials ignore the screams of reality? Was our national conscious trying to rescue us from ourselves?
We normally don’t face the truth until we have to deal with it. Pain is sometimes necessary to convince people they need to be rescued. It is the ultimate wake up call and a powerful motivator for change. We’re insolvent and it really hurts. Badly.
What are we going to do about it?
