Is Our Country Made Of Funny Money?

The last 5 to 10 years have brought amazing and some not so amazing changes to our country.  On an economic front we have experienced tremendous growth.  Corporate growth had been clipping along at a runaway freight train pace, shopping malls were full of people gobbling up the latest and greatest, and up until the past couple of weeks our stock market was soaring at all time highs.  Until recently, credit has been the fuel to feed this wild fire and now that the credit markets have become tighter we are seeing signs of a possible broken financial system.  Has all of this growth been created on a false promise to repay and is it all based on Funny Money?

The writing has been on the wall for years; every couple of months we are hit with the news that Americans are falling further and further into debt.  In a recent article, Should Credit Card Debt Be Illegal, I highlighted that it’s both a combination of individuals living financially beyond their means and also people simply trying to get by day to day on lower incomes with the cost of gas and food skyrocketing.  With the burden of rising costs and stagnant wages, what has attributed to the massive economic growth and prosperity we’ve experienced over the past decade?  I would argue that it’s been built on thin ice and a model of funny money.  Consumers are no longer paying for products they can afford and the mountains of debt are beginning to peak. There’s a “swipe it and forget it” mentality that has grown fast and furiously, which in general, we’ve all become much to comfortable with.  Gone are the days of saving your money and paying with cash for that next purchase;  just grab the credit card and go get it.  I wonder how many Ipods, Playstations, or Plasma T.V’s would’ve sold over the past 3 years if people actually had to dish out cold hard cash for them.  I would venture to guess that they wouldn’t have been flying off the shelves ever couple of month there’s a new version or model released.  Funny money is much easier to part with then actual green in the bank.

I’m a firm believer that we live in the most prosperous country in the world for the simple reason that fellow Americans are some of the brightest and most hard working people on earth.  My concern is that much of our growth and prosperity has been built around a “false” model of debt.  Clearly the balance sheets of the average family has found an increase of debt and it’s time that we look at eliminating this trend.  Funny money can only last so long and eventually there must come a time to start paying it back.  My hope is that we haven’t gone past the point of no return and made it impossible for people to manage everyday expenses and life while chipping away at those credit card balances.  Has all of our growth been built on Funny Money?