Black Friday is over and it seems that the American consumer has decided to return to their spending ways.
We spent $52 billion over the weekend, up from $45 billion last year. This may sound like good news for our beleaguered economy given that consumer spending is 70 percent of economic activity in our nation.
However, in returning to our spending ways we also returned to some bad habits from the past.
Since the crisis of 2008, American consumers have been busily paying down their consumer debt and socking money away in their savings. Prior to the crisis, consumer debt had been growing for several decades and our rate of savings was abysmal.
A healthy dose of calamity reformed our bad habits and we reduced debt and saved more- until this Christmas season. It is reported that this Black Weekend we went back to saying "charge it" and raiding our savings. That explains the jump in spending. It seems that our newfound discipline could only last for so long.
Or maybe we are just following the example of our government. The Congressional Budget office reports that our government has increased in size from $2.7 trillion in 2007 to $3.6 trillion this year. We are on track to increase to $5.7 trillion by 2021. Over the next decade our government will spend $46 trillion and borrow $8-9 trillion to help pay for that spending.
In spite of this reality, Congress has not been able to find the political will to reduce our borrowing over the next 10 years by a mere $1.2 trillion or 2.6 percent.
Republicans balk at raising taxes by rightly highlighting that government spending has rapidly expanded with no end in sight. So they call for cuts in spending and no new taxes.
Democrats point out that the Bush tax cuts, along with borrowing to fight two wars, have left us with much of the deficit that exists between government spending and government revenue. So they call for increased taxes and loath making cuts in spending.
The end result is the culture of "spend now and push the hard, responsible decisions into the future" continues to be the norm in Washington. It unfortunately appears to be the norm in our private pocketbooks, also.
Our economy and our government do not need quick fixes. There are none anyway. We need to claw our way out of this economic mess with sound personal financial choices that push our need for gratification into the future while we pay down debt and build savings.
In addition, we need to demand a government that also makes hard choices of increased revenue and restrained spending until we achieve financial stability. If only they had been selling that on the shelves this Black Friday!
Opinions expressed here are those of the author and do not necessarily reflect the views of Andy Rapp, Q-TV, Delta College, or PBS.