But if Americans were to collectively sacrifice\u2014everyone agree to eat only potatoes on Wednesdays or something\u2014that wouldn\u2019t help anyone except the potato farmers. Consumption in a market economically is almost always a positive-sum exchange; economic growth, and therefore prosperity, requires more<\/em> economic activity, not more sacrifice. If the big national problem were a giant war, things might be different\u2014we could all conserve gasoline and save it to fuel the tanks. But it\u2019s hard to see how sacrifice could solve the problem of rapidly rising unemployment.<\/p><\/blockquote>\n
Now, the essence of this argument is very true – indeed, in a market economy spending is the fuel that keeps everything moving.\u00a0 The problem is that we’ve equated spending with credit, and so people have moved slowly further and further into a cycle of spending money that they don’t actually have.\u00a0 I’ve certainly fallen prey to this many times over the years.\u00a0 It’s such a pervasive thing nowadays to buy with credit that we hardly think twice about it.\u00a0 So perhaps asking Americans to “sacrifice” is the wrong approach; perhaps asking American to stop going into so much debt would be better.\u00a0 Same goes for the government, which leads by example if nothing else, and has shown time and again that massive debt is okay, that spending what we don’t have is good, and that going out and buying stuff is the answer to the problem.\u00a0 Well, it may be on some level: the purchasing of goods and services naturally creates jobs and so forth.\u00a0 But again, doing this to the detriment of personal savings only leads to more trouble.<\/p>\n
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This is a critique of the system – not of the concept of buying and selling goods, or of capitalism – but of doing so without the proper financial means, and of our national leaders encouraging our doing so.\u00a0 Obama’s predecessor pushed Americans after 9\/11 to “go shopping” and now, in this current crisis, that’s exactly what Yglesias is saying, and what the Obama administration is saying.\u00a0 I suppose in a market economy, going shopping is<\/em> the answer.\u00a0 The question then is whether or not that should<\/em> be the answer, or perhaps more saliently, if this is the way things are, then how can we as a nation change so that markets work without people going into boatloads of debt.\u00a0 Spending is good only within the boundaries of our capacity to also save and to invest in our futures.<\/p>\n
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