FISCAL SANITY REQUIRED BY EVERYONE

By Bill Dunn

In a the church basement meeting room, an obese nation struggled to its feet. It paused for a moment, catching its breath, then said, “My name is America. I’m a borrow-a-holic.”

Everyone else in the room replied in unison, “Hi America.”

Maybe it is time for our country to join a 12-step program. And I don’t mean just the government, although with federal, state, and municipal budgets awash in red ink, that certainly would be a great place to start. No, I mean every segment of U.S. society needs to face its addiction, an addiction to borrowed money.

A recent “Mallard Fillmore” comic strip was at the same time hilarious and painful. It showed an annoying man sitting on Santa’s lap. The man was saying, “…and I want a plasma TV…and I want a BMW… and I wanna go back to the days when I could get loans that I had no intention of paying back…”

Ooh, the truth hurts. The fact is, not just government entities live on borrowed money these days. Every level of our modern culture is up to its proverbial eyeballs in debt. Most businesses, both large and small, have maxed-out their lines of credit. Families are choking on mortgages, home equity loans, car loans, and most pernicious of all, credit card debt. According to TIME magazine, the average American has nine credit cards with a total outstanding balance of $17,000.

Just as the mortgage meltdown sent shock waves through the entire economy earlier this year, experts predict another meltdown is just around the corner. But they’re unsure whether this next financial tsunami will be caused by credit card debt or by a different dire situation, student loan debt. These days the typical college graduate leaves campus with the following: a sack filled with dirty laundry; a degree; limited job prospects, beyond those which require hairnets and name badges; and over $100,000 in student loans. To paraphrase Dean Wormer in the movie Animal House: “Fat, drunk and in debt is no way to go through life, son.”

In the October 13, 2008, issue of TIME magazine, columnist Nancy Gibbs pointed out an undeniable lesson of history: “Cultures that don’t value thrift ultimately flame out and die.” In bygone generations the notion of saving money and avoiding debt was ingrained into America’s psyche. In the early 20th century, architect Louis Sullivan was commended for carving the word “Thrift” in large letters over the doorway of a prominent bank.

However, the virtue of thrift, according to Gibbs, “died with the baby boom.” In the mid-20th century, Americans saved an average of 15-percent of income. By the 1980s the rate had dropped to 4-percent. Today we’re in negative territory. “Somewhere along the way,” Gibbs explained, “thrift did not just stop being a value; it became a folly. Saving was for suckers.”