2/02/2008

The tough go shopping

How many more times can we ask the American middle class to save the world economy by going shopping?

The average personal credit card debt for a household is already $10,000. It’s not just sub-prime mortgages that are melting down; it’s good mortgages. Some homeowners now owe more on their homes than they can sell them for, and are heading toward foreclosure.

If every American gets $600 or more from the Easter Bunny this year, the smart ones will pay down their high-interest debt. The rest will buy more things, borrowing or charging the difference between their tax rebate and their new high-def TVs.

People who pay down their debt will be making the smartest use of a windfall, but they won’t stimulate the economy. Most Americans will rise to their patriotic duty, and make a major purchase that they can’t afford but have always wanted. It’s the American way.

Is the U.S economy ever going to get back to basics: investing in new plants, products and equipment instead of buying companies and moving money around? And will Americans relearn the quaint phrase their grandparents drilled into them: ”Always live within your means?”

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