There's one thing about the recession (and the economy in general) that really bugs me: Debt. Not personal debt so much, but debt owed by governmental bodies.
People complain about how we are becoming a nation of spenders, without saving any money. Where do you think this habit came from? Watching our government! The federal government as well as every single state (as far as I know) owes money to somebody, and is paying interest on those loans.
But, you say, how else would things get done?
Like they get done in the households of people who know how to save! If I want to buy a computer, I save money until I can afford it, and then I purchase it. The same thing goes for jewelry and virtually everything else less than the price of a car.
Loans exist to satisfy the impatience of people. I don't want to wait for 4 years saving money to purchase a new car, when I can purchase it today and pay for it over the next 6 years (notice the time difference there). This is especially true for houses; I don't want to save my money for 20 years to purchase a house, when I can buy it now, move in, and enjoy it while paying for the next 30 years.
But why are governments impatient? Sure that road needs to get paved today, but why not put money aside so that when it needs repaving in 20 years, we don't need to take out a new loan for it?
My problem with governmental debt really boils down to this: It is a black hole. If you borrow money to do something today, then you will need to not only pay back more than what you borrowed, you will also need to borrow more to do that same thing next year (or in five years, or ten years, ...).
So why don't governments save money? Why not tax a little more than you need, invest, and make money, rather than tax less, take out a loan, and lose money (which you will need to replace by taxing more in the future)?
Because elected officials want to lower taxes now, and do not care about the future. I would rather that my taxes went up by 5% today, the government stopped taking out loans, paid off their debt, and was able to drop taxes by 10% in ten years, than have my taxes increase by 1% each year out to the foreseeable future.
So here's my advice to government officials: Once we get out of the current recession, STOP TAKING LOANS! Pay off all of the debt, save some money, and lower taxes as the interest payments start going the OTHER way. It'll be a good model for your citizens, too.
