Because the average guy and gal on the street isn't really thinking about the "big picture" of the American economy, maybe we should.
Let me propose an idea, folks, that some economists are batting around that has to do with you and I, directly, in our country and the world.
There is a theory out there that proposes that maybe you and I make too much money, spend too much and live too high on the hog, so to speak, and that maybe we need to bring it down to the rest of the world's level.
Yeah.
It's called our "standard of living." You've heard of that.
The ideas are that maybe you and I and the whole country live beyond our means and both cost too much (we're paid too highly per hour, etc.) and spend too much.
Think about it.
It's virtually impossible to deny that we--both as a group (read: a country) and as individuals (people individually and per households)--are in way too much debt so I think we can safely take that for granted.
The one, last part of this to consider is that maybe we do, as a nation and individuals, maybe make too much money, especially compared to the rest of the world.
And this is the tricky--and unpleasant--part.
Maybe what we do isn't all that special, and that much above what all the rest of the world does and makes. Sure, we used to make GM cars and all that but we know we've put most of our manufacturing offshore.
And when you put this all in the context of our debt and this huge downturn in the economy, with the Federal government trying to spend our way back to where we used to be and propping up not only huge manufacturing sectors of our economy but also banks and financial and insurance institutions, it gets to looking as though this may be true.
Those economists who are discussing these thoughts and issues are suggesting that maybe our government shouldn't, in fact, be throwing $700 billion in TARP money at us, in an effort to prop up our economy and economic way of life.
Sure, they should keep us out of a true economic depression in the shape of the 1930's but we're already in huge debt. Does it make sense to get and put us in much, much deeper debt, instead of letting this business cycle play out a bit more?
Are we, perhaps, setting ourselves up for a much worse situation by doing this?
But no one wants to think on these things--with the exception of economists.
Granted, if we did or do "ratchet ourselves down," it would be painful. Incredibly painful. We'd have to look at ourselves and our country in a completely new way.
For decades, we've thought of ourselves as rather wealthy, even by our own standards. There was nothing we couldn't have, if we only worked hard enough. Hell, our billboards, radios and televisions told us all this, ad infinitum. Why would we think or believe anything else?
And we really did believe, as Michael Douglas' character--Gordon Gekko--in the movie "Wall Street" said, that "greed is good", whether we want to believe that or not.
So, if this is true, that we have to lower our standards, that is, lower our wages, lower our purchases (and we're already doing that, as a nation, check it out), lower, really everything, it's going to likely be painful.
And the more we fight it and push this possible, even likely, possibility away, the more painful it will be.
Denial makes things worse, especially in these matters.
If this isn't all true, the data sure makes it look this way. Stay tuned.
Links: http://www.imdb.com/title/tt0094291/
http://globaleconomicanalysis.blogspot.com/
Side note: Tip of the hat to Michael on this. We've been discussing this for a couple years. I've been meaning to write on it for some time. Thanks.
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