Government bailouts delay learning from mistakes

November 16, 2009 —

What if I were to tell you that our current economic crisis was not a result of Wall Street? That the financial sector, General Motors, and CEOs of multibillion-dollar corporations are not the reason that we are suffering from the worst economic downturn since the early 1980s? By now, I am sure that many of you are either intrigued or writing me off as a rabid, right-wing, pro-business conservative. This is hardly true. To see who really caused this recession, all one needs is a mirror.

As human beings, we have a long and notorious record of trying to pin the blame for our actions on someone else. For years, we have spent without thought as to the longterm consequences of living beyond our means. And until now, foreclosures and repossessions were just horror stories meant to scare high school economics students. When the economy soured, we decided that the job losses and foreclosures would still not touch us. After all, that sort of thing only happened to “other people,” and instead of reigning in our spending habits and living more modestly, we continued spending hand over fist for our five-dollar Starbucks coffee, hundred-dollar jeans, and thousand-dollar super laptops.

The government has hardly been setting a shining example, with hundreds of billions of dollars going to spending projects in hopes that people will spend more and jump start the economy. The irony of this is that as long as people get bailed out after making poor decisions, they never will learn how to take proper care of their finances. The very root of our problems continues to go unaddressed, and until it is, this cycle of overspending will go on indefinitely.

While it may be tough to cut back on our spending, it is crucial that we do so. Especially as students, the full weight of student loans has not yet hit as we do not have to worry about paying them off until after we graduate. Likewise, for those of us who are fortunate enough to have garnered enough scholarships and grants that we have to pay little to nothing out of pocket, we have not had to deal with the reality of literally having no money to spend and living paycheck to paycheck.

I’m sure that many people will criticize me for saying that we need to restrain our spending during a recession because spending is what will strengthen our economy. While this may be, if we downsize our rampant consumption of goods, and reign in our spending, we may very well see a decrease in the price of goods. It all relates to simple supply and demand. If we demand less in the way of high-priced luxury goods, the prices of these goods will drop, making them more affordable for all. And I’m sure no one will look to spread the blame around when it comes to more affordable goods.