Thursday, January 24, 2008

Spend It All!

Well from the latest news, a round of tax rebates is just about a done deal. The government needs to "give" people more money so that they can spend it to boost the sluggish economy.

It seems to me that there is something wrong here. Why is it that we all need to spend every penny we earn...and keep the economy chugging along? When I was young, people saved as much as possible. Credit was used sparingly and only for major purchases, like a home and perhaps a car. If we wanted something, we saved for it. If something worked, we kept it; if it didn't work, we got it fixed. Only as a last resort did we dispose of it. Now, if something doesn't work, we toss it and get a new one. If we can't afford it, we buy it on credit. Savings, what's that? Most technology is made to become obsolete within a few years. Cell phones, computers, video game systems, etc all have a life of just a few years or so before a major upgrade or replacement is necessary. We would have been better off without all this stuff. Maybe the Amish have the right idea of forsaking technology and conveniences.

We are sometimes chastised for not saving enough and being too deep in debt, but when there is a reduction in consumer spending and the economy slows down, the economists and politicians panic like they are now. I wonder what would happen if everyone stopped spending on all but the necessities and started saving like in the "old days". Would the economy completely collapse?

I think everyone who gets a rebate should either sock it away in savings or use it to pay down old debts. Don't spend a penny of it on anything new.

So Sayeth The Shack


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