The pandemic’s adverse effect on the economy demonstrated how poorly Americans were prepared for an economic downturn.

We watched lines of cars waiting for bags of food. But wait. Isn’t that a Range Rover and in the next line an Escalade? Americans live on credit and roll the dice that their future income will cover today’s purchases. America’s credit card debt is around $8 billion. I read a survey where people were asked if they received a surprise $400 bill would they be able to handle it. The majority said no. Not $4,000, but $400. I asked a financial advisor how much should we have in the bank? Take your fixed expenses (mortgage, rent, etc.) and multiply by 12. How many really do that?

What our voracious spending habits does do is spur the economy. Retail expands to meet the demand. Our government is printing money as fast as possible and sending it out as a stimulus package — not to be saved but to be spent to keep the economy humming along. So in the end do we save to keep ourselves out of those food lines or spend to keep the economy afloat? Is our economy just a giant ponzi scheme? Hopefully we will never know.

Steven Howard

Redwood City

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(2) comments


Mr. Howard,

I agree with your comments that Americans spend more than they should and fail to save for a rainy day and way too many would not be able to deal with an unexpected bill. I will guess that you got your credit information from the same sources you get your political information because you are off by a factor of over 100. A couple of quick searches in a couple of minutes indicate that Americans owe over 900 billion dollars in credit card debt, not 8 billion.

Terence Y

Mr. Howard – I’m not surprised if people receive a surprise $400 bill and they can’t handle it. After all, when businesses are being shut down due to unscientific closures and unemployment rates inevitably increase, there’s no income to balance the outgo. Housing and food are usually the biggest expenses… so people aren’t going to be buying “stuff” to spur the economy. Newsom losing $31 billion to EDD fraud, and $billions of other wasteful state spending also aren’t helping the populace – because the bill will become due. Biden-flation also isn’t helping, as money isn’t going as far as it normally would, in periods of controlled, or no, inflation. Again, these increasing bills will become due, and some already are.

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