Economic Realities; Fact or Fiction? or Can We Start Borrowing Ourselves into Prosperity Again!

It is 2012 and the real estate bubble collapse is still winding down to a new economic reality – what reality is still in question. The actions that led up to the really downturn I don’t think has really changed. Sure lending rules have tightened up but people generally still want the latest, greatest products and they want it now – even before their current product has outlived its usefulness.

I’m not mixing examples, really because a house is just the biggest example of how we want the latest – greatest. Here is a quick funny video of how excessive borrowing helped get us into a mess. Afterwards I will speak to where we are and where I think we should be headed.

Ok – I know you are thinking that was so 2005 but is it really? Perhaps we cannot borrow ourselves into massive unsupportable debt in homes for a while but what about big screen TVs? Do we really need the latest computer, tablet, e-reader, gps mapper, or other such devices or can our old system still work for a while?

Many of you reading this will be thinking – John, if we can afford it – why not keep up with the Joneses? I would ask are are you borrowing to buy the trinket? If so then you cannot afford it. Arguably a car or house might not fall into this category but for most things – borrowing just does not make sense. It sets you up for unrealistic expectations, debt, and paying high interest rates that keep you from doing important things with your life.

So if you are not borrowing to get the latest trinket – why not buy the latest and greatest? Doesn’t supper-heating the economy help give American’s jobs? Isn’t this patriotic? First I would ask you if your old device or method has stopped working. If not what are you going to do with your old device that has not outlived its usefulness?

If you are giving the old device to someone that will get the full use out of it – perhaps this is not so  bad but if you are turning it back in the manufacture or “recycling” it – you are contributing to the myth of our age – that a super-heated economy leads to prosperity! You are buying stuff just to buy stuff with the latest bells and whistles!

If this was the animal kingdom – you would be killing just to kill instead of killing to eat!

Ok – do you want to know how I really feel? I don’t think most people are bad because they suscom to the temptation of commercialism but I do think they have not really thought things through. Is a life pursuing happiness by keeping up the the Joneses realistic? Can stuff make us happy?

NO!

It can only give us the illusion of happiness for a short time – until the neighbors buy the latest, greatest – then unhappiness rules!

That big screen TV is not as big, only 2D, not back lit or some other calamity that cannot be resolved without going into debt or spending hard earned savings (decreasing financial stability of the family) and finally achieve nirvana!!!!

Ok – you can see my point – it is a never ending cycle and with the R&D to production cycle shortening – it will be a never ending cycle. Why not search for meaning elsewhere and resist the temptation to keep up with the Joneses?

The first thing you will notice is relief! You see keeping up was not achievable in the first place.

The second thing you will notice is your finances improving. You will have more money saved and less debt for whatever turns out to be really important in your life.

The third thing you will notice is while you have older stuff – you can start focusing on helping family and friends, giving to charity, supporting your community and perhaps church – whatever altruistic notion that captures your imagination!

AND you will have discovered accidentally the path to happiness. Unselfish acts!

You will reap the rewards of taking the path less traveled.

Unfortunately I don’t think we will as a people, suddenly become frugal and good stewards of our money – but if enough of you do – it will pay benefits to you (and if you teach your children wisely) and yours.

I hope you have enjoyed my alternate reality today – check back for another tour of the universe.