Wednesday, January 23, 2008

It's the Economy, Stupid!

I was watching the Today Show this morning, and I noticed a recurring theme from the sound bytes from our illustrious presidential candidates. They kept talking about the poor souls who “live paycheck to paycheck” and those where are victims of “predatory lenders.” It made my think to myself, what about responsibility?

I mean, these candidates are telling us that they will take care of us. But why do we need taken care of? Because we have been stupid.

Why would somebody be living paycheck to paycheck? Sure, there are legitimate folks who have had a string of bad luck who need assistance. But for the majority of folks, they simply spent more than they make. It seems to be how our society is groomed.

What if the majority of people had 3-6 months of living expenses tucked away in an Emergency Fund? And what if people avoided debt and actually paid for things.

If they have a crisis like a lay-off, instead of repossessions and foreclosures, we’d be discussing strategies for a new job or career. And, we wouldn't be asking Hillary or Barack for help.

Which brings me to Ron Paul.

Let me just say first, that I am not endorsing one candidate over another, and I do not yet know who I will vote for in this upcoming election.

But after hearing this talk about all of these “victims” (true, victims of their on irresponsibility), I happened to hear an interview with Ron Paul on the radio during my commute.

Amazingly, he said what I had been thinking. The problem doesn’t require spending more money to help people (for instance, an $800 tax “refund”), but rather a change in behavior. The Fed needs to stop cutting interest rates. That is only a temporary band-aid that, in the long run, weakens the dollar and encourages more borrowing and consumption.

Instead, the government should be encouraging saving and spending less that you make.

I’m not smart enough to completely understand all that Mr. Paul was saying, and I’m certainly not smart enough to repeat everything here. But, let me just say that he is the first candidate who made sense when it comes to the economy.

The government spends too much money, and so do its citizens. Let’s learn to save for a rainy day, and stop charging our coffees. Let’s take responsibility for our own stupid actions, including agreeing to take out risky loans.

Seems like we could use a good dose of grandma’s common sense right now.

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