Do the patriotic thing: Use credit cards, pile up debt


December 14, 1992|By ROGER SIMON

.TC The signs are everywhere. Confidence is up. The economy is improving. And people are buying things they don't need.

Thank goodness.

"In another sign of an improving economy, consumers took on more debt in November," an anchorman said the other night. "Credit card debt surged ahead, while cars loan sagged."

And so I want to know this: What is wrong with you people? Why aren't you out there buying new cars? Don't you realize you have an economy to support?

On the other hand, it is very good news that Americans are buying more junk and charging it to their credit cards.

Most banks are gouging consumers for about 18 percent interest on credit cards, yet banks are paying consumers only around 3 percent interest on their savings accounts.

You know what this means? It means banks earned a record $8.5 billion in the third quarter of this year. Which is excellent news. If you happen to own a bank.

But let's not be gloomy. Ideally, when banks are making money, that means they can loan money to you.

And that means you can go out and buy things. And get even deeper in debt.

Which improves the economy. And makes everyone happy.

And people are happier. A few months ago, most people I know were worried about being laid off, and they were cutting down on spending.

Today, most people I know are still worried about being laid off, but they are spending their money anyway.

This is very American. We are not a gloomy people. We can stay depressed only for so long.

And then, when we can find an excuse, we burst forth and start buying stuff.

The excuse this time is the election of Bill Clinton.

It is as if someone blew a whistle on Nov. 3 and said: "OK, gloomy time has ended. Happy time has begun. So get out there and shop!

And millions of Americans are suddenly feeling so good they are looking for something to buy.

Clinton is trying to temper this a little. He said our economy can be repaired "if we can simply all begin to take responsibility again, stop placing so much blame and work together." And, he went on, "I intend to show you some real discipline in the budget process."

Which doesn't mean you should show discipline. On the contrary.

Your lack of discipline is what is making the economy start to bubble.

You have probably seen the reports on sales on the weekend after Thanksgiving. Shopping set a record with a $133 million spent.

"People are willing to take a risk," is how one reporter put it on the nightly news.

And you know what's really moving off the shelves this year? Here is a lead from the New York Times of a few weeks ago:

"Latest reports on video sales show that -- cost notwithstanding -- home theater is the season's hot ticket."

Cost notwithstanding?

When is the last time you heard of people buying something regardless of the cost?

Actually, it doesn't matter when you last heard it. They are doing it now.

In case you don't know what a home theater is, by the way, it is a gigantic TV screen linked to elaborate sound equipment.

First, you need something called an audio/video receiver. Powerful ones go for somewhere in the $800 range.

Then you need speakers, which can easily cost you another $1,200. Then you need that giant TV screen for, let's say, around $2,000.

And that's the hot ticket this year.

Do people have any more money now than they did a few months ago?

No, but they are now more willing to spend the money they don't have.

Which accounts for that gigantic credit card debt. Which is making all the financial analysts so happy.

At one time it was very much within the American ideal to save money, to buy only what you needed and to stay out of debt.

Today, it is patriotic to buy far more than you need, go heavily into debt and don't think about tomorrow.

So remember as you lay down that plastic again and again in the weeks ahead: Only you can save America.

Cost notwithstanding.

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