The diversion of trillions of dollars into uneconomic and unsustainable uses has cost this country in ways that can scarcely be imagined. The creation of vast unfunded liabilities and unsustainable entitlement liabilities will haunt us for decades as we struggle with the consequences…READ MORE.
My Take: The reason this piece caught my eye was because the author provided an additional dimension of what he defines as the American Dream. His broad-brushed definition of the American Dream is consumption based, but he goes on the couple consumption with easy/low-rate financing.
A lot of what is said is already known, but it is presented in a way that helps you understand that the inability to obtain credit easily and at a low rate will cripple what many seek in life, to obtain more stuff. Honestly, if people can’t be happy in life without having to take out loan upon loan, then our entire culture needs to be reassessed.
The only thing I would add is… that when you have easy/cheap credit you are going to have a push towards higher consumption. This isn’t an American thing, it’s human nature. Yes, it may take a generation or two, but when people grow up with cheap credit they will come to take it as being normal. If rates have been low your entire life, you’re probably going to think of it as the way things are. Not everyone is going to have the ambition and honestly to evaluate the past and future consequences.
I don’t see the American Dream as being married to cheap credit and therefore, the dream is still alive, but more difficult to maintain because we’ve become more grounded in reality. The reality is money doesn’t grow on trees. The old saying is true.