Perceived Prosperity

From atop the Stoa this day, I am pondering whether I am well of, average, or poor. By any measure of wealth in the world, I sure look prosperous. My home has air conditioning, I have more than one computer, more than one television, cell phones, and a gas grill.

However, I must wonder whether this wealth is real or perceived. Now, don't go all daft on me, my laptop computer is not going to evaporate once I make a philosophical discovery. I do not live in the quantum world.

Here is a story that I've been pondering as it relates to our nation and us as individuals, since national finances do not work quite the same way as your home finances.

Lets say you earn $100,000 per year. For decades, this amount was enough for you to build your household wealth, replace items that became outmoded, educated your children, fixed your driveway and even allowed you to hold enough money to lend to your neighbors.

Then over the course of time, you decide that you want to add on to the house, make some more space for new friends that have a desire to live with you. You expand your driveway, loan more money, and buy all sorts of new stuff for your home.

In the past, you were saving up for your retirement. You felt that putting away $100 per week was a fair amount. As your expenses continue to rise and they begin to push up against your ACTUAL monthly earnings you decide that instead of putting a $100 dollar bill in the savings account, you write an IOU in the accounting books. The savings account looks like it is still growing, but the dollars in there are no longer growing. After a while, expenses climbing, you decide to raid the savings account and replace those dollars with IOUs. For a little while, you are able to finance your expenses, but the savings account is now gone, replaced only with little white strips of paper.

After some more time, you begin having to borrow money from some of your other neighbors to continue to meet your obligations. All those people that have moved into your home now expect a certain kind of lifestyle. You yourself have also grown accustomed to all the nice things this money (debt) has bought. You still bring in $100,000 per year, your expenses are now $180,000 per year and growing rapidly. You are still loaning money to other people, even while you promise more and more goodies to the people living in your home.

Eventually, your neighbors begin to become reluctant to loan you more money. Not to be deterred, you begin to print your own money, backed by your future earnings and material possessions. That can not last forever and eventually, no one will take your fake money any longer. Things must be paid for now in real currency. No one accepts anything else any longer.

A huge argument ensues where two camps of people emerge. One wants to borrow more money and spend more, making the assumption that adding on more debt makes you more prosperous. The other says that we must cut spending, get our debt paid down to less than we earn every year and become a frugal people once more, just as we were in the past.

The group that advocates spending has told the other people in the house that they can have and keep whatever they want, in the hopes that they will continue to listen to them. The other group is like your grandparents, telling you that you will have to make due with the same clothes for a few years, drive the same car for more than 5 years, and work harder, perhaps even work for a promotion to earn more money. One is an easy option, the other is a harder option. Humans intrinsically go for easy if given a choice.

We will have to decide, as a people, if we want to live like a banana Republic, doing as we please, printing what we please, and ignoring reality. Or, are we going to bite down and remember who we were and still are. We have this choice to make now. It seems like the children are still in control, though, and that saddens me. Sober, common sense Americans know what we need to do, but they are more interested in elections then reality. I find that you can ignore reality for only so long, before reality reminds you that it has not gone anywhere.

The reality is that Reid, Obama, and Boehner are more interested in what their constituents think and feel rather then what must be done for the good of the country. As a country we will have to cut back our spending. You can not spend $80,000/yr more than you make every year for decades and not expect to have to do without in the future.

Are we really wealthy as a people? Am I really prosperous? We have been living on the international credit card for a very long time. We have made promises to our people that we simply can not keep, no matter what the level of taxation. Hang ever rich person upside down and shake every last penny out of them and that does not even finance our debt for A SINGLE YEAR!

We live in a nation of perceived prosperity. If we are spending 2.5 trillion every year on everything from guns to butter. Next year, if we can only spend $1.65 trillion, then we have some difficult choices to make. As a nation, as a people, and in our families.

So I wonder, regardless of what the children in D.C. end up passing or not passing, what the next few years are going to look like.

I go now, to fix a mid-day meal. I gave up red meat long ago, not because of health, but because of cost. Time to eat my chicken and my salad. Wonder what my lunch will look like in a few years.

Live well,

--Zavost