What is our lifeblood?
Barack Obama said last Tuesday that our country’s lifeblood is credit and I have heard other politicians make similar statements. At first it sounded like a sensible statement, but the more I thought about it the more it sounded faulty. To put it another way, that statement means our country’s lifeblood is our ability to get ourselves into debt. Making it easier to get ourselves into debt is the exact ability that got us into our current economic crisis. I understand that credit is a very important thing to keeping commerce moving forward. There are certainly businesses and individuals who are attempting to get loans to expand their businesses or purchase homes. However, if credit didn’t exist at all, goods and services would still be purchased - it would just take longer to save up the money to do so. I would instead argue that productivity is our country’s lifeblood. Productivity is the measuring stick that lenders use to determine whether someone is worthy of taking on debt. If someone is not going to be productive especially with someone else’s money, they shouldn’t be given a loan or extended credit. After thinking about this topic, it seemed like such a simple concept. This doesn’t appear to be an extraordinary revelation to me, but why are our political leaders still pursuing solutions that will make it easier to get ourselves in to debt? It seems that pursuing solutions that make us more productive would be more sensible. Thoughts?
