Mr. Brilliant and I live fairly modestly by American standards. Yes, we have a house that's more room than two people really need, but it's a 1400 square foot house, which is tiny by the McMansion standards of today. We have two cars, but one's a Civic and one's a Corolla. One's paid for, the other will be next year. We don't carry credit card debt (and when we do, we pay it off as quickly as possible), and we put off home improvements until they can be paid for with cash.
We also bought our house nine years ago, so if the real estate market crashes, we have a pretty good ways to go before we owed more than it's worth.
Most of my clothes are bought online from clearance, I grocery shop with coupons. Yes, we go to Jamaica almost every year, but we pay for it with current funds, and the place we like to stay these days doesn't cost much more than a week at the Jersey shore would. One of our TVs is 15 years old, the other is a big ProScan behemoth we inherited from Mr. Brilliant's father. That one is probably about eight years old. I may love movies, but I haven't rushed out to buy a plasma wide-screen HDTV for four grand. We both work in IT, and just bought our first new PC in six years.
We're baby-boomers. And we live frugally.
So one would think we have little to fear from the coming crash. The problem is that all those people tapping their illusory home equity to buy ever-larger SUVs and big-screen TVs and turn their 1960's ranch houses into 4000 square foot McMansions because God forbid we shouldn't look richer than the neighbors, are going to drag us all down with them.
But it isn't just them. This orgy of "What, me worry?" about spending is being led the Party Formerly Known as the Party of Fiscal Responsibility. Yes, we're talking about the Republicans. When else in this country's history has a war been fought with NO sacrifice asked from ANYONE -- and with the wealthiest getting big tax cuts on top of it? This goes back to Reagan, with supply side economics and the idea that you can have everything you want, and it's all free, because the magic of trickle-down will make debt and deficits magically disappear. Except it won't:
You owe $145,000. And the bill is rising every day. That's how much it would cost every American man, woman and child to pay the tab for the long-term promises the U.S. government has made to creditors, retirees, veterans and the poor.
And it's not even taking into account credit card bills, mortgages — all the debt we've racked up personally. Savings? The average American puts away barely $1 of every $100 earned.
Our profligate ways at home are mirrored in Washington and in the global marketplace, where as a society America spends $1.9 billion more a day on imported clothes and cars and gadgets than the entire rest of the world spends on its goods and services.
A new Associated Press/Ipsos poll finds that barely a third of Americans would cut spending to reduce the federal deficit and even fewer would raise taxes.
If those figures seem out of whack to you, if they seem to cut against the way you learned to handle money, if they seem like a recipe for a national economic nightmare — well, then, at least you're not alone.
A chorus of economists, government officials and elected leaders both conservative and liberal is warning that America's nonstop borrowing has put the nation on the road to a major fiscal disaster — one that could unleash plummeting home values, rocketing interest rates, lost jobs, stagnating wages and threats to government services ranging from health care to law enforcement.
David Walker, who audits the federal government's books as the U.S. comptroller general, put it starkly in an interview with the AP:
"I believe the country faces a critical crossroad and that the decisions that are made — or not made — within the next 10 years or so will have a profound effect on the future of our country, our children and our grandchildren. The problem gets bigger every day, and the tidal wave gets closer every day."
The numbers are truly mind-boggling:
In the charge-everything start of the new millennium, savings have plummeted: to just 1.8 percent last year, below 1 percent since January and at zero in the latest estimate from the Bureau of Economic Analysis.
The lack of savings is mirrored by a rise in debt. In 2000, household debt broke 18 percent of disposable income for the first time in 20 years, meaning debt eats almost $1 in every $5 American families have to spend after they get past the bills that keep them fed and housed. (That figure hasn't dropped. Credit card debt alone averages $7,200 per household.)
The only thing that's kept the U.S. economy looking as "good" (sic) as it has is debt spending. Americans have been relying on double-digit increases in home values to finance their lifestyles. Even now, people are buying overpriced homes with interest-only mortgages, or tapping their equity up to the house's current value -- gambling that values will continue to rise. And when the fall comes -- and it will, even if it's only a drop of 10-20%, these people are going to be waist deep in the big muddy.
So it's hardly surprising that these are the people who continue to vote for the politicians of the Reagan legacy, who spend like mad and insist that "market forces" will take care of it.
Leaders are elected by the people they serve, of course, and the American people seem to want the best of both worlds — tax cuts and government services — while they hope the dollars sort themselves out. They worry about the nation's problems, but not enough to agree on a course of action to fix them.
The AP/Ipsos poll of 1,000 adults taken July 5-7 found that a sweeping majority — 70 percent — worried about the size of the federal deficit either "some" or "a lot."
But only 35 percent were willing to cut government spending and experience a drop in services to balance the budget. Even fewer — 18 percent — were willing to raise taxes to keep current services. Just 1 percent wanted to both raise taxes and cut spending. The poll has a margin of error of 3 percentage points.
And why should they be? Reagan told them it's all free and it'll magically disappear if you only give rich people enough tax cuts. Well, C-Plus Caligula has given more tax cuts to the wealthy than anyone else, and now we're drowning in debt. Of course, the Americans polled know that if taxes are raised, they'll be raised on THEM, not on Bush's friends, who were the recipients of most of the federal largesse during this Administration...and yet, they supported tax cuts for them at the time. Perhaps they thought they'd be invited into the club.
You know, I don't have kids, so I really shouldn't care. I should just hope that it hangs on long enough for me to live out my days and then check out as I thumb my nose at posterity and say, in true Republican fashion, "I got mine, so fuck you." But for some strange reason, this heathen pagan with no personal investment in the future feels a responsibility to not leave the world I live in a complete mess. I only wonder why the people out there on Route 17 every Saturday, with their kids strapped into the back seat of a vehicle larger and more fortified than soldiers in Iraq have, embarking on an orgy of shopping before going home to their 6000 square foot home in which entire days can go by without one family member crossing another's path, don't care.
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