AMERICA NEEDS A SPANKING

At what point in time did the US Government go from Uncle Sam to Father Sam? With the collapse of the housing market, and the fear of a recession, Americans are witnessing a shift in Uncle Sam’s traditional role. Analogous to the father of a giddy Catholic school-girl who racks up an outrageous credit card bill, the US government is looking to bail the American people out of their own mortgage troubles. While this may sound appealing, especially to those whose third refinance has them drowning in debt (much like most of my extended family), it is not a feasible solution.

For the first time ever, the U.S. Government is attempting to alleviate personal debt accumulated through idiotic financial decisions. Although the Presidencies of both Herbert Hoover and Franklin Roosevelt saw the Government step in to help fight economic plight, they were dealing with Americans who had no money, not Americans who owed money. Along with owing money (and lots of it), today’s America has no capital left in its markets. All of the capital generated by the salaries of working Americans has been transferred to the paying of interest, not to the buying of goods on the floor of Macy’s.

What does it mean? It means that a rate cut will not translate to a flood of capital into the economic market. The Fed’s recent rate cut will only allow John and Sally (with three kids, baseball, a Hummer, a Suburban, an over-mortgaged house, and a cat) to use the money they save to pay interest on their other debts. Whether it’s cars, or it’s credit cards, American financial troubles extend far beyond mortgages.

The scary fact…Well, we’re heading for a recession. There is no doubt in my mind that the problems in the housing market will, and in many cases already has, transfer over to every other industry, dragging this country into a deeper and deeper economic hole.

Unfortunately in today’s world dominated by materialism and image perception, cutting back on the penalty for stupidity will teach the American people nothing. We are not giving these people jobs, nor are we giving them a way to pull themselves up by their bootstraps; instead we are giving them a get out of jail free card. And what does this card teach the American people? Absolutely nothing! We are allowing them to believe that carelessness is acceptable, and that when they go into credit card debt, we’ll drag them out of that too. This is not how you save a nation from economic ruin, but rather how you keep it there.

How do you teach that giddy Catholic school-girl that running up her credit card bill on Juicy Couture and Victoria’s Secret is unacceptable? You give her a spanking.

We cannot reverse the path we are on. We will have a recession. Instead, we must prepare for the future. The American people need to know that it’s not acceptable to buy a Mercedes when you have no money, that it’s not okay to refinance your home six times and have nothing to show for it, and that it’s not alright to use your credit card more than you use your tooth brush (that one’s for the dental critics). The only way the American people will ever learn this lesson is to get a spanking. People who have refinanced four times only to buy a BMW and a boat need to lose their homes, and people who move into a house they cannot afford because they feel the need to impress society also need to lose their homes. The man who lives at home with his mother and has declared bankruptcy three times, needs to have his Hummer taken away. Only when what the American people value most, material, is taken away, will we ever learn our lesson.

And while this sounds harsh, cruel, and cold, it is. We are passed the point of niceties. We are at the point where the U.S. Dollar and Canadian Dollar have the same value, where the price of oil is over $81 per barrel and where jobs are being outsourced everyday. The debt the American people have incurred through careless investment choices merely adds onto an already crumbling building.

It is not the incursion of debt that is so horrible, it’s the incursion of fruitless debt that is. The woman who is in debt because of cancer treatment not covered by her insurance does not deserve to lose her home; however, she can never receive aid when first we must deal with John and Sally and their third refinance. I know first hand what fiscal stupidity can do to a family, and I wish it upon no one. In the end, if we hope to save America for the future generations, me must be smart, and we must be steadfast in our reprisals. If not, you need to be placed over Uncle Sam’s lap and get a spanking.