Americans are debt addicts. They love to spend. The politicians love to spend. Everyday Americans love to spend. Spend, spend, spend. And we wonder why many things, our society even, feels so cheap.
People live on credit. They finance cars, houses, vacation – cell phones – think about that – PHONES. They don’t save.
And why should they? They get nothing for saving. There’s literally no real return on socking money away in a bank these days. And they, the Keynesian central planners, are the ones who have largely facilitated this state of affairs. This war on frugality. This war on sense. This war on savers. This war on independence.
(From The Mises Institute)
Writer Neal Gabler recently “confessed” his “secret shame” in anAtlantic Monthly article on how a huge percentage of middle-class Americans are living beyond their means, existing paycheck-to-paycheck, and are mired in personal debt. He writes:
I never spoke about my financial travails, not even with my closest friends—that is, until I came to the realization that what was happening to me was also happening to millions of other Americans, and not just the poorest among us, who, by definition, struggle to make ends meet. It was, according to that Fed survey and other surveys, happening to middle-class professionals and even to those in the upper class. It was happening to the soon-to-retire as well as the soon-to-begin. It was happening to college grads as well as high-school dropouts. It was happening all across the country, including places where you might least expect to see such problems. I knew that I wouldn’t have $400 in an emergency. What I hadn’t known, couldn’t have conceived, was that so many other Americans wouldn’t have the money available to them, either.
The article is worth reading if only to track the spending habits and lifestyle of someone who has done well income-wise, but now is caught in a huge financial trap, and things will only deteriorate from there. Gabler tries to find and fix the blame, and it ranges from the banks to individuals to “keeping up with the Joneses.” That is all well and good, but he fails to point out the role of the Federal Reserve System and the poisonous ideology that undergirds all Fed actions: Keynesianism.