Living Beyond Our Means

J Philip Faranda December 17, 2008

Perhaps I am a little jaded by the large number of short sales I am doing, but is anyone living within their means? I run into too many people who put granite counter tops ahead of saving for retirement, or new bathrooms ahead of college funds. When the creek ran high they had no reserves. I think the real issue is that as a society we are addicted to excess. There are no reality cable shows on saving money, just shows on punking up the car, jazzing up the bathrooms, upgrading the kitchen, and buying a dream house, balance sheet be damned.

The same goes for the government. I heard on NPR yesterday that California is in the red for $15 billion in 2008 and is projecting a $27 billion deficit for 2009. They are running out of cash to run the state so severely that they only have a few weeks of available liquidity. My own state of New York has a deficit, and supposedly conervative Kansas of all places is also among dozens of states in the red. The TARP funds that were supposed to purchase toxic mortgage securities are now used for buying stock in banks, bailing out dysfunctional US car companies, and who who knows what else, while we just sit and vote these jerks back in office term after term. This is the hugest bait and switch in the history of free markets. If the government is this irresponsible, and huge companies are this inept, is it any wonder that Ken and Barbie can’t make ends meet either?

I am too busy to storm the Bastille. However, we should all do whatever we can in our own way to buck the trend. I have no bullet point resolutions at this point, save for the fact that my fiscal attitude for 2009 is far more reserved than it was for 2008. Perhaps if everyone is more pragmatic going forward, the recovery will be more solid and built less on fragile Galbraithian feaux commerce.  

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