Some d-bag from the Cato Institute was on NPR the other day telling us not to indulge "frugality chic": "[I]f you're blessed with good fortune in these hard times, you're not helping anyone if you let frugality chic stop you and yours from having a very Merry Christmas indeed."
It pissed me off, given that conservatives are always the ones complaining about how we're all spending too much. I mean, I've always given them credit for that. And now this? It's like how "Mr. Fiscal Conservative" George W. doubled our debt in his eight years, from 5 trillion to 10 trillion. Which is it, spend or save? Make up your damn minds. Or at least practice what you preach (and settle on what you're going to preach.)
I do know that it hurts the economy when consumers pull back in times of recession. But it also hurts the economy when consumers use credit to spend on granite counters and FUVs when times are good. Myself, I just can't switch gears that way, between frugality and profligacy depending on the economy, nor would I want to.
There's no real point to this post. I'm just beginning to doubt economic principles (like Keynesianism) that I used to accept as raw truth.
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It seems to me our whole economy is based on spending more than you can make, selling things at higher and higher prices and finding untapped markets to sell to. I do understand that prices not rising means my retirement portfolio and pension is not going to increase but maybe we need to find a way to switch to a sustainable market economy instead of a free market economy.
ReplyDeleteThat sounds right. There are two strongly competing schools of thought about macroeconomics: the Keynesians, who believe the pie can keep getting bigger forever, and who often fuel that growth through massive government debt, and the Miseans, who believe its essentially a fixed pie, zero-sum, cyclical game. Optimistic Keynesians tend to be liberals, dour Miseans tend to be conservatives (though by all means not always--it's the optimism/dour dichotomy that is more important). I used to be a Keynesian, along with everyone else in the US. But I'm starting to take Mises more seriously, including his "let the chips fall where they may" approach to regulation, the very tiniest bit more seriously. But only a little bit more seriously. :(
ReplyDeleteDang. I don't even HAVE economic principals. Ten percent of my paycheck goes to my church, and the rest goes for stuff I need and some stuff I just want. Since my personal economics haven't changed much (except gas prices), my spending hasn't changed much either. Perhaps I should pay more attention.
ReplyDeleteI have (almost) always lived within my means. (The exception...once in the mid-80s I had about $2000 in credit card debt for a couple of years that I couldn't seem to get rid of...but then I had a windfall of $2000 and paid it off, and have (almost) always paid off my credit card debt every month since then.) So now, cutting back is harder when you're already living close to the bone. But I have surprised myself at how much we continue to cut back. But cutting back as a temporary measure is easier if you know "someday soon" you'll be able to spend again.
ReplyDeleteuh, that was me, Chip, just now.
ReplyDeleteChip, do you want to be added to the blog? I don't think I can change the Blog name though (but I'll check). If you just want to "comment" that would be fine, too--not trying to pressure you!
ReplyDelete