Spend your money!

I’m going to beat this drum until the skin breaks and the frame is a crumpled mess on the floor. Those with money should spend it. The fastest way out of the recession is to not give in to the fear that is generated by the constant hyperbole put forth by politicians and the news media. Recognize the realities of what’s happening in our country and stay positive, even optimistic. My wife who has a common sense wisdom that surpasses most says our country is undergoing an enema right now. And I think the analogy is perfect. Our system has built up a lot of crap, a lot of waste which is being flushed away in a sudden rush. Only when the garbage is disposed of can we fully function healthfully. Without the flushing of the waste we’re a constipated, bloated glutton whose appetite for over consumption will only make things worse.  But here is the good news; approximately 90 percent of our nation has secure employment. I underlined secure because the number of employed persons is actually higher. But some are clearly under threat because their employers fear what is happening, or what is going to happen next. More good news, approximately 96% of home owners are not in foreclosure. Ninety percent aren’t even late on their mortgage payments and never have been. Additionally people all over the country, including yours truly, are refinancing their mortgages at under 5-percent. Some are wiping out debt; some are lowering their mortgage payment. Some are doing both. Gas prices are near record low levels when adjusted for inflation. You want to talk about hard economic times? I found myself with less money in my pocket last summer when it cost me over $100 to fill my gas tank. Now it costs just over $50. I don’t drive much, only about 11,000 miles per year; so I only fill up 2-3 times per month. So I’m saving $100-$150 dollars per month. For those who drive considerably more than me the savings might be as much as $250-$400 per month. Congress and President Obama are about to approve tax cuts of about $250-billion, while spending over $500-billion on mostly infrastructure projects. It’s the first time in our history that such a combination has been tried. Historically, either massive spending programs like those of FDR’s New Deal were tried; or tax cuts like Reagan’s tax cuts of the early 80’s were our leader’s solutions for a slow or dire economy. Never both. It’s educational to observe that the depression of the 30’s lasted ten years in spite of Roosevelt’s back-to-work programs. The Carter Recession lasted from 1979 until 1982 when Reagan’s tax cuts were put into place. By 1983 the economic recovery had begun. By 1984 it was humming, and it was “Morning in America”. The longest economic growth cycle to that point in U.S. history followed. Time will tell if Obama’s combining of tax cuts and spending has as positive an effect. I’ll tell you what will help…nearly immediately. Those with money need to spend it. They need to be responsible, and only buy what they can truly afford. But to those who are advising American’s to pull back there money, and hold on to it for a while to see which direction the wind is blowing I say with full throated roar, “Shut up. Shut the hell up”.  You’re being un-American and unpatriotic and you are not doing anyone any favors. Americans are smart people. Under the circumstances if Americans can’t afford something they won’t buy it. They don’t need fear mongers telling them not to buy that which they can responsibly afford. All the comparisons of today’s circumstances with the Great Depression are irresponsible and untrue at worst, and premature at best. Heck we haven’t yet even approached the kind of economic morass we settled into in the early 80s. At that time interest rates were at 20%. They had to be in order to combat the double digit inflation which scourged our nation for 4-5 years. Unemployment in the early 80’s was double digits also. And in a five year time span gasoline prices quadrupled. We’re so much better off then at that time, and we got through that time. And we’re also much better prepared and educated about what to do when faced with today’s circumstances. Believe it or not the Herbert Hoover administration actually passed large tax increases in 1930 and 1931 in order to balance the Federal budget. It seems incomprehensible that our government could have been so irresponsible and uncaring for the masses at a time when unemployment was on its way to 25%. We didn’t have unemployment insurance in the 30s, which won’t make anyone rich but isn’t supposed to. It’s supposed to help carry us through rough times. Bank’s closed at record rates in the 30’s because of bank runs when people were afraid of loosing all their money. That’s not a concern this time since we have the FDIC. Deposits up to $250,000 are guaranteed. Cut back where you need to. Back in the early 90s I remember a life insurance agent advising my wife and me that our death benefit on a new policy should be three times my annual income. Well, I bought some new life insurance a couple of years ago and was advised the coverage should be approximately ten times that of my annual income. Why the change? I love my wife and kids, and should I die prematurely I’d be happy in my soul knowing I’d provided them with enough money to get by comfortably without me. But they shouldn’t be enriched because of my death. And I shouldn’t ask them to do without things they may want and need now because I’m overpaying for a life insurance policy that costs too much. (Don’t worry. I’m not going cheap on my loved ones. They are adequately taken care of to my wife’s and my satisfaction). I use the story as a metaphor. I bought the life insurance policy. I just didn’t buy more than I needed. Are you overpaying for something? Where can you cut back while not depriving yourself or your family? So let’s remember FDR’s words, “The only thing we have to fear is, fear itself”. I’m a business owner so I have nobody but myself to rely on for my income. I’m aware of what concerns people have and am being prudent in how I address these times. And in this case, as in most cases, helping your neighbor also helps yourself. Though as the Bible teaches us I prefer to teach a man to fish and feed him for a lifetime, versus giving a man a fish and feeding him for a day. Simultaneously, my neighbor’s house is on fire. Not wanting his flames to spread to my home I have no intention of haggling over his use of my garden hose. It’s my sincerest hope that these words will help alleviate your angst, or fear. Pledge with me now, please, don’t engage in discussions over how bad things are. Don’t perpetuate the negativity that is scaring the weaker amongst us. Be strong, be optimistic, and talk and act accordingly. Look confidently toward the horizon with the anticipation of a magnificent sunrise. If enough people get this message the trying times will be shortened and real challenges of a free people can be addressed from a perspective of strength. I ask you to please share this article, or at least it’s thought with others. Don’t be ashamed of being optimistic. It’s a highly attractive characteristic. Thanks for visiting. Comments are welcome. 2009-04-28T23:59:28Z

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spend-your-money

2009-05-01T13:31:58Z

2009-05-01T05:32:55Z

Here's an easy solution to our economic recession, spend your money.

Spend your money!

2009-05-01T05:32:55Z