My friend Jason weighs in with a "guest post" this morning:
George Will diagnoses here three causes which stifle American economic growth and, consequently, deepen global financial woes further:
- Ecological protectionist legislation enacted by the United States which heavily taxes foreign "carbon-intensive" goods
- Refusal by the Obama Administration to allow for the "creative destruction" of failed corporations such as General Motors and Chrysler (Will argues that such executive intervention doesn't allow the corporations to die naturally which would free up greater amounts of capital over time.)
- Rising long-term interest rates resulting from national governments, most notably Great Britain and the United States, borrowing heavily to pay off their respective national debts.
The financial picture that Will paints in his editorial isn't pretty. The Standard and Poor indices he cited regarding British and U.S. national deficits relative to their total national gross domestic products for this year prove especially disheartening.
But Will shines some much needed light on a solution already in the works courtesy not of the latest Obama Administration czar or Congress, but by an increasing number of individual American consumers. The major credit company, Visa, reported that in the fourth quarter of fiscal year 2008, and for the first time ever in U.S. financial history, purchases made by debit cards exceeded credit cards.
In other words, individual consumers decided to buy goods and services with only the money immediately available in their checking accounts as opposed to increasing their monthly credit debt.
Spending only what you have. Imagine that.
JRG