The Remarkable Economic Recovery
Or a Credit Binge.
December 31, 2003
The double-pump of better news on the economy and in Iraq alike boosts the president over a mid-fall slump to a stronger political position than he's seen in months.I know that a cash economy is virtually impossible. Credit keeps money moving in the economy, evening out the intervals between expenses and income. I am grateful for credit; it kept me going several times when our family was young and expenses outran the immediate cash available. I never thought, however, that my financial situation was a healthy one. Several times my debt position was precarious. I was never bankrupt but I was not managing well and I was embarrassed. It certainly never occurred to me at that time, and I still find it incredible, that a financial situation like mine would one day be a model for the economic program of a Republican administration. Maybe if I had announced that I was in “economic recovery” because I was borrowing and spending money, I could have run for Congress!
My web browser says there are about 2,650,000 references to economic recovery on the internet. I hate to add another one, but I feel constrained to warn that much more reference to it in the news, as though it is a historical fact and a done deal, is going to make me throw up on my monitor. These business and political reporters have to know better. I got no more than a “B” in college economics, and I know better. Anybody who has ever depended on credit cards to get from month to month knows better.
Increased economic activity does not by itself mean economic recovery. The old cliché about rearranging the deck chairs on the Titanic is not an exact enough metaphor. Playing musical chairs on a Titanic lifeboat is more like it. When we see the borrowed money paid back to the creditor, and the borrower in a stronger financial position than before with an enhanced credit rating, then it may be said that the borrower is into “economic recovery.” It’s nonsense to call his borrowing and spending phase an “economic recovery.” Economic recovery means new money invested in new ventures, not new money paying off old debts.
Any kid with a credit card can borrow money and spend it. That’s economic activity, not economic recovery. There’s no economic recovery without economic activity, but there can be plenty of activity without recovery.
Activity is exciting, in its way. So is the whirling water in a drain, but it goes down the drain just the same.
About the Author:
Barnabas started paying off some time ago.
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