That Makes Me Stabby: Do We Have an Obligation to Spend?

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The other day I was watching CNN. (I need to stop doing that. It tends to make me stabby.) On this particular day, a pundit declared that people who aren’t currently suffering as a result of the economic decline have a moral obligation to spend their money to help save the economy. I must have blacked out at that point, because I don’t remember what was said next.

You can probably guess my answer to the question: Do we have a moral obligation to spend? NO!

I didn’t get us into this mess, and it’s not my responsibility to get us out of it. I didn’t get a mortgage I can’t afford. I didn’t buy multiple cars I didn’t need. I didn’t let mounds of credit card pile up without panicking. I didn’t console myself with shopping. I didn’t fill my house with useless crap because it was on sale.

I am a frugal person and a wise spender. Why should I throw all that at risk because our government and our financial industry forgot that whole notion of saving? Or because they decided that shopping is the American way.

It wasn’t my obligation to shop after 9/11, and it isn’t now.

Who Is Obligated to Spend?

The economy can’t continue to be fueled by rampant consumer spending, but some organizations do need to spend. So who are they?

The banks who took bailout money

You can’t accept billions of dollars of financial stimulus and then sit on it or pay it out as bonuses. That money was intended to be loaned to qualified borrowers like stable businesses, home buyers, and car buyers. So start lending – that’s your job.

State and city governments

I’m not saying that state and city governments can’t have savings. They can and should so that economic dips can be weathered, but they also can’t just stop paying teachers and halt transportation projects. Again, the banks need to be making loans to states and cities so they can continue to fund their workforce, who will in turn contribute to the tax pool, which will keep the economy going.

The Federal government

Again, not permanently. As I said yesterday, we need to pay down our debt, but the government also needs to fund real stimulus projects that will put money into worker’s pockets. Not tax breaks, not bank bailouts, but jobs. Then once the economy is rolling again, Congress needs to cut wasteful spending and stop rampant borrowing so we can get out of debt as a nation.

Consumers certainly contributed to our financial disaster by taking out too much credit, buying homes they couldn’t afford, and living beyond their means. However, this is a national problem, not just an individual problem. They couldn’t have bought those homes if the government had effectively regulated mortgages. They couldn’t have taken out so much credit if the banks had abided by basic credit standards. They couldn’t have lived beyond their means if the first two practices hadn’t been permitted.

I don’t believe in trickle-down economics, but in this case, the situation won’t get better for the consumers until the issues at the top are resolved. That has to happen in the banks and the government, not with already tapped consumers.

What do you think? Do we have an obligation to spend? If not us, then who?

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