Social Responsibility...

Good Evening Everyone,
Like you, I have been watching my mutual funds, stocks, and retirement portfolio tank. It seems that big business has been unable to manage their affairs appropriately and now our government has to step in and stop the bleeding.

Now, I am not in favor of governmental intervention into private business. I believe in the Capitalist Economic Model of allowing the market place determine the success or failure of a business. I believe that we should allow these struggling companies to fail. This would allow another company to step up and do the job with more efficiency. Never should we allow our government to own or have a majority share in any business venture. It is not our governments job to compete in the market place. It is also inappropriate for our government to decide which business receives government funding and which will not. It stinks of socialism and is a dangerous path that ends in an all powerful govenrment and a weak economic structure.

With all of this said, I believe that we as Americans have to take a large part of the responsibility for the economic crisis that faces us. Ever since the end of W.W.II, American's have prided themselves on living well. Suburbs were built in record numbers; job opportunities were plentiful, and people started making a good living. With this prosperity, we grew and flourished as a society. With profitable economic fortunes we started to believe that we were entitled to a certain standard of living. We believed that everyone should have a house and a car and a stable income.

During the three decades after W.W.II, Americans were, for the most part, able to live comfortably with a one income family. However, as the 1970's and 80's rolled around, Americans started develop a taste for luxuries that one income could no longer afford. We believed that each family should have a nice house, two cars, nice furniture, top of the line electronic equipment, etc... During this period, companies started targeting children to buy products that they really didn't need. But with prosperity, our parents purchased these things for us and as a result we started to believe that we were entitled to this increasingly luxurious lifestyle.

As the 1980's came to an end, credit card companies started to mass market their product. Large financial institutions like Bank of America started issuing Visa's and Mastercards to almost anyone who would apply. This extension of credit was the start of our decline. With this newly acquired credit, American's started purchasing things that they simply could not afford. Families were going into huge debt. Families could no longer afford to live on one income and they were increasingly finding it difficult to live on two incomes.

As we went through the 90's, lending institutions started to extend mortgages to families who really weren't qualified to incur such a debt. Families purchased homes that were way out of their price range. Both parents were forced to go to work, which left children to be raised in daycares and after school programs flourished. Many of these families soon realized that they were in over their heads and the financial strain became more than they could bear.
As a result, mortgages went into default, families filed for bankruptcy which meant that credit card companies were left with these individuals unpaid debts, and our economic structure broke down. Individuals could no longer afford the luxuries that they had become so accustomed. Businesses shut down because families lost their purchasing power and as a result, jobs were lost.

Now, we find ourselves sratching our heads and wondering what happened. What happened was that we as individuals have been irresponsible and have made poor economic choices. We can blame banks for giving us credit, we can blame mortgage companies for giving us our overpriced homes, and we can blame our employer because we lost your jobs. But the truth is that, we are too blame for our economic collapse.

It is time that we understand that we need to have a realistic expectation when it comes to our standard of living. I have been to Mexico, Central America, South America, all over Europe, Canada, and to the Polynesian Islands and I found one thing to be consistant in every place I visited. The people of each of these countries lived within their means much more effectively than we Americans. In fact, many of these countries have a healthy disdain for us because they perceive Americans as spoiled rich kids who expect the world on a silver platter. Looking at the amount of resources that we use it is hard to argue with their perception.

Politically we complain that our government is spending too much and we are acquiring too much national debt. But the truth is that we are doing the same thing. Young adults today are wanting to start their married life having everything it took their parents a lifetime to accumulate. This is an expectation that cannot endure. We are responsible for our countries economic woes and we need to face the hard truth that we need to cut back on our standard of living.

Why should it be an exception that a familiy lives within it's financial means and doesn't carry debt? Why is it so difficult for families to wait until they have the money before they purchase something? Why do we insist on immediate gratification?

I believe that if we continue to live with the expectation that we can live above and beyond our means, then the stability of our nations economic structure will be permanently damaged. You need to understand that their are countries who are doing very well at managing their affairs and are accumulating a great deal of wealth. In fact, China is the largest purchaser of our national debt. At anytime they could cash in their bonds and crash our economy. We have given our economic leverage away to another country and we did it willingly with our eyes open.

Financial responsiblity starts with you and me. We are going to have to learn to live within our financial abilities and work to eliminate our debt.

I have faith in the American Spirit and I believe when our backs are to the wall, then we will respond. Why should we have to wait for our backs to be against a wall for us to do the right thing? Let us step up now and control our personal finances. It just makes sense.

I pray that you are all well and thank you for checking in.

Jeff