It is hard for most of us to understand what we should do to get through this crisis. Where should we put our money? Should we save or spend? Do we risk a job change or stay where we are? Is now a good time to refinance the mortgage? The questions are endless and we each have different concerns.
For me, it’s trying to figure out whether I should cut back and save more or keep spending as I have. I’ve already cut back, mostly on gas and fuel oil. But should I cut back more? If so, where?
On the one hand, we’re told that our endless spending spree is what got us into this mess. On the other hand, we’re told that we need to spend our way out of it. So, if I cut back on my spending, will I be contributing to the loss of a job or the closing of a store or other business? Will my increased savings allow my bank to lend more, thus loosening credit? Frankly, I’m confused.
I came across an article in the NY Times today that attempts to answer my question.
To Spend or to Save? Trick Question
It’s your fault. Part of it is, anyway. You, the American consumer, spent too much money. You bought too much house, took on too much debt and generally lived beyond your means. Your free-spending ways helped cause the worst financial crisis since the Great Depression.
And now you’re going to have to do your part to end the crisis. How? By spending. Enough already with the saving that many of you have suddenly begun doing. This very moment, Congress and President Obama are preparing to send you a tax rebate, to inspire you to stimulate the economy. So go out and stimulate. Spend as if the future of your country depended on it.
What follows is a guide to spending and saving, both sensibly and patriotically.
The author, David Leonhardt, offers some excellent suggestions and with some thought I’m sure we can come up with some of our own.
Now if only we could find answers to all the other questions that are floating out there.….