January 2004 Editorial
Financing the Future
The friday after Thanksgiving in the United States is historically the biggest shopping day of the year, and 2003 was no exception. At Walmart alone, shoppers spent $1.5 billion on that weekenda staggering sum, even by Pentagon standards. I would bet that the lions share of those purchases went on credit cards. I would also put money on the fact that most of those items, bought at not-to-be-undersold prices, will end up costing said consumers far more than sticker price by the time many months if not years of finance charges factor into the mix. Does financing the future for a quick fix today sound familiar?
The faster money moves, the healthier the economy. Revenue from sales and income taxes helps the government, and profits benefit the producers, sellers, and employees. However, it takes the release of money to move it from the consumer to the constantly revolving system of manufacturers, wholesalers, distributors, vendors, and advertisers all of whom must render a certain amount unto their local, and not-so-local, Caesar.
The key word is release. That means out of your pocket. That means deducting an amount from your bank account, your net worth. Or most likely, in the case of zero net worth, it means deducting a greater amount from your future. Buy now, pay later. Thats what most of those Walmart shoppers did on that glutinous weekend last November. But the reality of later rarely enters into the decision to hand a stranger standing behind a cash register the power to extend your indebtedness far into the future with 46.75 square centimeters of plastic. What ever happened to saving for something you want?
People used to put something aside for a rainy day, have a fund for an emergency, or simply stash a few bucks in a cookie jar for someones next birthday present. No longer. We use the plastic. I dont know many people who even have a savings account. And what happened to saying, No, I cant afford it this month — or at all?
This country used to be proud of its made in America ethic, but thats all gone now. We want the jobs but we also want the cheap goods. We dont care where that computer, car, or shirt came from. On that Thanksgiving weekend, one woman was seriously trampled in the melee to pour dollars by the bucket load into the coffers of other countries and into corporations with offshore addresses. We aggressively patronize an entity such as Walmart, driven by our zeal to save a buck, yet we bemoan the reduction of our wages, benefits, jobs, and civil services. We wonder why the local hardware store closed down, or why our schools are so underfunded. We curse the ubiquitous pothole that we never fail to hit. But hey, Joe Consumer just scored a PC for $500-and-change, whose parts were made of inferior materials in a nameless land by peasants working for a bowl of rice.
The Bush tax cuts were to stimulate the economy, and that they did for a short blip on the economic radar screen. America experienced a quick sugar rush at Walmart, but is now suffering a financial insulin crash. By spending that free $200 or so, our Joe Consumer bought a few more video games, or six-packs of beer, or maybe even a night on the town with the wife. Chances are J.C. spent more than the windfall, so he is not better off than before, he is worse. He either has less in his bank account or is in greater debt. And the tax cuts will bankrupt the future of his children, for the money will not be there. In fiscal year 2000 the U.S. had a federal budget surplus of $230 billion, the largest in history, and we now face the potential of a $7.5 trillion deficit by the time this Administration is finished with us.
Lets stop the madness, or at least slow it down. We, the People, have the ultimate power. We can bring corporations to their knees by simply curbing our spending spree. The only reason they are so huge is that they have our money. Do we really need that latest Nintendo game, the new-model car, or eight more pairs of shoes? Would that money serve us better in a savings account, acting as a cushion for the next time we are really wanting? We still need to spend to maintain a thriving economy, but lets stop trampling our future out of existence by being a bit more responsible in our decisions to relinquish our hard-earned cash. In the same way America embraces and supports obesity by increasing the stock of MacDonalds, Wendys, Taco Bell, and Jack-in-the-Box, we also wildly and enthusiastically promote our own indentured slavery with our signatures on the credit slips that we sign almost every day of our in-arrears existence.
The small print: the author wishes to admit that he drives a Japanese car, reads the poetry of Borges in Spanish, enjoys wines of many countries, and has a strong penchant for foreign films. He has never set foot in Walmart.
© 2004 Stuart Vail