You ever wonder what happened to pay as you go? You know, that silly old idea that if you have the money for something you need or want you could buy it. But, if you did not have the money you could not buy it. If it was an expensive item, you would need to set some money aside each pay period until you had saved enough to buy that item?
As hard as it is to believe, this quaint old idea was promoted by major corporations (albeit for completely self-interested reasons). I have read that Henry Ford used to send social workers out to the families of his employees to help them understand that they should be careful how they spent their money. Not to blow it on short term wants like entertainment or booze, so that they could save and eventually buy one of Mr. Ford's cars and other home appliances the factories churned out. After the great depression, people tended not to buy on credit. They knew that the future might actually offer less that the present. The future was simply to uncertain to risk one's prosperity.
Of course, we have been living in the era of easier and easier credit over the past few decades. This is the era when we have been encouraged to spend freely, to buy today and worry about it till tomorrow. We live in the era of the unimaginably prosperous tomorrow. Tomorrow, we will be wealthier. Tomorrow, we will be healthier. Tomorrow we wont be such jack asses toward one another. Tomorrow, always tomorrow.
So what brings these musings on a cold fall night in late November?
There word coming out of Team Obama that very shortly after he takes office, the new president will sign into law a several hundred billion dollar 'stimulus' package as a means of 'saving the economy.' I suppose that this is laudable, though we have yet to see the details, and, given the Clintonistas that Obama is bringing back to the white house, I don't think there much hope that this will be more than yet another give away to large corporations. I don't think anyone realizes how conservative Barak Obama is. Well, we are all gonna find out, now aren't we?
In any case, I don't intend to complain about Obama's plan since so little is known about what it might include. My interest is in how the wheels have come off the fiscal ship of state. The idea that the USG is prepared to run trillion dollar deficits and more each and every year, for as long as it takes, to somehow solve the explosion of a global debt bomb is the very height of stupidity. More debt to solve the problem of too much debt, huh?
How is this possible. Well, I already wrote about magical thinking. But, more that that is a kind of magical thinking that befits the label Pollyannaish! The idea that, if we spend all of the future's prosperity today, the future will be so much more prosperous than it otherwise would have been that we will be able to have everything that we want today and still pay for everything we will want in the future and then some. Man, talk about the miracle of loaves and fishes. It is as if you went to the fridge for a late night binge with the expectation that by eating extra today there will be even more in cold storage tomorrow! It can happen! It's just like magic!
This is surely folly. Though, to be honest, the last thirty years have been mostly folly. You cannot borrow from the future ad-infinitum. One day, that future arrives, and it is much more impoverished than anyone imagined when they were robbing it blind all those years now past.