Austerity starts at home

[Bgno64]

http://blogs.lancasteronline.com/smartremarks/2010/07/07/austerity-starts-at-home/">Smart Remarks:

So this then is a time of retrenchment not just for governments but for individuals, for families. It’s personal - but the personal needs to become political.

What I mean by that is, “recovery,” as it’s commonly defined, is a return to the “normalcy” of the past decade, when wages remained flat but consumers spent more anyway, much of it on credit.

Policymakers don’t seem to see any alternative to this. You, personally, need to spend more in order to buoy the system; but what if your wages have been frozen and you can’t spend more? In this system it doesn’t matter - you must spend anyway because other jobs are dependent upon your willingness to do so. Hence, “stimulus” measures that put money in your pocket, with the hope that you’ll spend it. Hence all the money poured into the banks - with the idea being that if they’re better capitalized, they’ll lend more to you; you can take on even more debt in order to support the system.

Pardon the bluntness, but: Screw that.

If now is a time for national austerity, then certainly it is a time for personal austerity. For individuals to spend less, cut up their credit cards, buy only the things they can truly afford. This becomes a political act, a way to protest and maybe ultimately change the system - as well as a rational means of self-preservation.

This ripples down the line, of course. Consumer retrenchment may inflict grievous wounds on our consumer-based economy. But the broader debate that we should be having but aren’t is, should ours be a consumer-based economy? Is that the best way to create broad-based prosperity? What’s its track record? And if it isn’t the best, what’s better - and how to we get there from here?

Everybody wants top-down, big solutions to our nation’s big problems. More and more, I’m thinking that the only solutions are the small solutions, personal solutions. The system as it exists can grind on, but you don’t have to be part of the system. And if you think the system destructive, immoral - then you mustn’t be.

[liberal N proud]

1. Starving a recession will be disastrous

[skepticscott]

3. And how many recessions do we have to feed

with money that the government doesn't have to begin with, before everything collapses? Some people talk as if we just need to do it ONE more time, and then our economy will perk up, tax revenue will start rolling in, we'll start to pay down the grotesque national debt before the interest service on it will subsume the whole budget, and we'll all live happily ever after. Those are scary people. Or else people who know they'll be dead before the US government starts defaulting on their obligations.

[liberal N proud]

4. Look to Ireland for an example of austerity!

You think things are bad now!

[skepticscott]

5. No, I don't think things are that bad now

They could get far, far worse, but most people think that because this is America and that because they are Americans, they are somehow magically insulated from that. And the fact that our politicians can't stop trying to paint the rosiest picture possible doesn't help.

[burnsei sensei]

2. I have not had a credit card in about 17 years.

I don't miss them at all. I could tell back then that we were digging ourselves a pit we would never get out of.
I also could tell that the protections of the New Deal Era would come under heavy assault in the near future.
The assault has come.
There are no protections for consumers.
If the captains of our economy want more consumer spending, then they'd better pony up the damn wages or get out of town.
And once there, we'll charge them a steep tariff just to reinforce the lesson.