Due to the fact that elections never end in this country, there are alot of people talking speculating (already) about what will happen to whatever political party during the next set of elections in 2010. Couple this with the fact that we have a nonstop news cycle, there’s quite a lot that gets published about very little.
Just like everyone else, I read the news and understand what’s going on, and there has been one thing that’s recently bothered me quite a bit. The talk of the national debt and the sheer percentage of the economy it takes is the highest in 60+ years. Today the New York Times put out an article on the interest costs of the national debt, which you can read here. The numbers are astounding. (You can check out a calculator here http://www.usdebtclock.org/ ) So, couple that with the elections, and you’ll have people saying things like ” this president has increased the debt too much, I wont be voting for him in 2012″. I have 1 question for these people
How do your finances look?
If they are on-par with the average american, the level of debt that they have at the household level is probably shockingly high, as a percentage of their income. Over the past 35 years, we have become a country of debt, from the government all the way down to your neighbor. Purchasing things with credit became the norm, and soon the phrase “saving up” (as in: I’m saving up for a new car) disappeared from the landscape. Gone were the days where you made do with that crappy, inefficient washing machine until a new one could be bought with cash. Everything from needs to wants to “must-haves” were bought on credit, and no one ever looked back and thought “where the hell am I going to get this money?”.
While we were buying everything on credit, our savings rate also dropped, but has recently rebounded to the highest level in 15 years, but who knows if that will last. The chart below only goes to 2008, but the picture is clear. One quarter, americans somehow spent more than they earned. Keep in mind these are just averages (and as trent points out, averages can lie).
Way to go America!
So, as you criticize the government for spending too much, why have you (most likely) been doing the same thing for the last 10 years? It’s time for EVERYONE to take responsibility for the not-so-wise decisions that we have made (myself included, read up on my latest bone-headed move here).
So are you living under a mountain of debt? Well, you’re not alone, and personal finance blogs are here to help you!. You can check out my blog for occasional finance talk, or check all my side links for all personal finance, all the time.
Also, this is not supposed to be a defense of any president, current or past, but more of a wake up call that we ALL need to set an example and do the right thing, take blame where it is due, and be responsible for our savings again.
I’ve been featured in the “best of money carnival” this week. Check out my post and some great other ones over at corporatebarbarian.com
