Spend or save?
As children at one time or another we received that first piggy bank. When extra change was found in it would go in. When grandparents dropped by for a visit, folding money would slip through the tiny opening on top of the bank.
It was a fascinating time to get shiny pennies and quarters and put them away for later use. Initially, it was a game, a fun task of putting coins in a bank and then shaking it. Depending on the number of dimes and nickels inside the noise might make quite a racket.
As we grew older, the concept of saving either stuck or didn’t. It all depended on how our parents handled the process and what they taught us about the value of all that loose change. If mom and dad urged us to hold on to it for a rainy day or some special item, we might have learned a thrifty lesson. If mom and dad let us pull out the rubber plug from beneath the pig’s belly and shake out what we had collect to spend on candy or small toys, we might have learned the money burning a hole in your pocket lesson. These two basic economic approaches are ones that we learn as small children and carry with us as adults.
I’ve been amused at the TV commercials featuring a person dressed in a pig costume following a man around as he thinks about purchasing a big screen TV. He goes back and forth about purchasing the item, always looking back at the pig who is peering over his shoulder. When he finally decides to not make the purchase the pig gives him a pat on the back of encouragement. “Feed the Pig” is the spot’s tag line.
Apparently, one group in Finland has produced TV commercials with the opposite viewpoint. They believe by “feeding the pig” during this worldwide economic downturn it hurts local businesses. When you don’t purchase coffee at you local shop and make it at home, you are taking money out of that local shop owner’s pocket, making it harder for him to run his business.
The Finnish perspective is it takes a free flow of spending to generate the economic waterwheel.
The issue we face as Americans is, we never have saved a significant amount. Let’s face it, if anyone does save it’s a small percentage of individuals and they don’t look to government as their guide. The national debt continues to soar and will get even larger as President Obama’s stimilus (recovery) bill is likely to be enacted. The debt and large spending are in Sen. Tom Coburn’s crosshairs. His office sends out The Pork Report regularly, outlining what he describes as wasteful.
And some of his offerings do look quite outlandish when taken at face value. His latest dispatch suggests that public support for the recovery bill is slipping with most independent voters opposing the plan. Based on a telephone survey conducted by the Rasmussen Reports between Jan. 21-22, 59 percent of U.S. voters worry that Obama and Congress will increase government spending too much in the next 12 to 24 months. This is an obvious reaction to the $800 billion recovery package. Can we spend our way out of bad times? We shall see. Should we continue to scrutinize how government dollars are spent? Wholeheartedly we should and I believe Coburn’s regular missives contribute to voters learning how their tax dollars are being used.
Everyone wants our economy to turnaround, so there are no more major announces of job cuts, increased home foreclosures and severe market drops. The problem will not be solved overnight because it didn’t happen over night. It’s a direct result of our failing to learn the basic childhood lesson — spend of save?
Spend or save?