7 Aug 2011

The financial crisis - living beyond our means?

The financial problems that have become apparent since 2008 can be put down to individuals and nations living beyond their means. How can the US government continue with an exponentially increasing debt? Why do people crank up huge credit card bills when they have no likelihood of ever paying them off? Why do many wealthy individuals in places like Greece make tax avoidance a way of life?

What happens next is hard to figure out but we are in for a period of pain and readjustment. Just maybe the outcome, eventually, will be a good and fair one but I can't help thinking we are entering troubled times where the threat of violent revolution is not far away.  This is a time when moderate people with good judgement need to make the voice of reason clearly heard.


Casey Bahr said...


Very, very thorny question. What "living beyond one's means" *means* is open to interpretation depending on your political point of view, what one views as necessary and what one does not.

Here in the U.S., on the left it would mean cutting back on our defense budget, which is the right's sacred cow (the right always calls for cuts, but not for defense). On the right, they want to cut all so-called social welfare programs, the left's sacred cow.

Things are so polarized in the U.S. now that it is nearly impossible to make headway in a rational manner, so yes, severe crisis is lying in wait, it is just a matter of time.

Of course, underlying all this are the very large financial interests that pull the strings unseen by the common folk. This was the cause of the 2008 debacle (see documentary "Inside Job").

Their only interest is in making more money and they don't care who or what they hurt along the way. With the current situation of privately (corporate) sponsored elections in the U.S. we will have a very difficult time to change that situation absent a severe crisis, and probably not even then.

All democratic nations have a way out of the debt mess which puts economic control in the hands of the voters and I urge you to view "The Secret of Oz" to understand that simply, but seemingly radical idea.


Julian Moss said...

Yes, a thorny question, but I'm not sure the answer is to put economic control in the hands of the voters since these are the same people who voted for politicians that promised what we clearly cannot afford.

I don't know what the answer is, but I think the explanation is that most people in the western world are driven by greed. What's more, the system does not reward people who live prudently. I paid off the mortgage on the house 10 years ago and have been debt-free ever since. But stock market crashes and low interest rates have hit the value of our savings while those who borrowed to buy bigger houses will have benefited from the rise in property values since then. And those who spend instead of saving will be entitled to benefit handouts when they have nothing left to live on.

Chris Nelson said...

The problem in the US has been obvious for the last thirty years. Lack of real leadership and greed has captured all branches of government, media and business. Voters are powerless, so eventually we are headed towards a conflict that makes me glad I don't have children.