About a year ago, I traded MPC in for Vodka and thought that I was doing my part and spending some money in a slowing economy. As things have spooled out since Vodka became my new ride, I’ve come to understand several things about the American economy:
- Way too many people and families were living on the edge of fiscal disaster a year ago. Robbing Peter to pay Paul became common practice beyond those living that way to pay for catastrophic life experiences or the seriously poor.
- Way to many small/mid-sized companies were trying to survive on the edge. With unrealistic expectations of future sales and questionable capitalization choices, many companies had boxed themselves in a debt corner.
- Big banks stop being banks and started being gamblers. And they weren’t playing with house odds.
- Collectively, the US economy spent more money than it made in any given year.
So, in short, prior to the implosion of 2008 the economic model as it existed was unsustainable from the bottom up or the top down.
In the time since the implosion, I’ve experienced the following:
- My wages have been effectively cut 17%.
- Seven people were layed off from the small engineering firm I work for.
- I’ve started taking lunch to work (or dining on comparatively inexpensive pretzels).
- I’ve paid more than $4.56/gallon of fuel.
- Watched as the government pours untold and unimaginable amounts of money into big corporate America.
- Asked how financial experts could be so stupid more times than anyone (including me) really wants to know.
In looking at this recovery method, I’m left with one very big question: What good does it do in the long term to return to a model and a production level that has already proven to be unsustainable?
A slightly smaller question: Is a modest recovery to something where collectively as a nation spent less and didn’t extend ourselves quite so far something that the US can actually do?