I received a copy of a letter to a congressman via my boss from one of our advisory council members who is a very intelligent farmer who received a few degrees including a law degree. He had some interesting thoughts, thoughts that I think that Americans should know. We shouldn't be left in the dark to the fact that our lifestyles may be part of the problem.
HIS OBSERVATIONS:
1. Much of the current problems were caused by having too much credit, at too low an interest rate, for too long.
2. This allowed too much debt to be accumulated at the private, corporate, and government levels.
3. Today, a shortage of credit is part of the problem.
4. The Current Accounts Deficit has been running about $700 Billion a year, which is almost 5% of GDP, or over $2,000 per year for every American! This is NEW debt owed to other nations. Until now, other nations have been willing to “enable” our addiction to living beyond our means with very low interest rates for T-Bill type of instruments. There is no guarantee they will continue to indulge us with cheap financing, especially if they fear the US Dollar sliding against their currencies.
5. This excess credit also caused asset price bubbles. Housing price declines seem to underlie many of the other problems currently plaguing Wall Street.
Here is only one part of his recommendations as they relates to us:
The American public needs to be clearly told that we have lived beyond our means for too long, and there will be pain associated with shifting to a more sustainable life style. Till 20 years ago we had a recession about every decade. These were a reality check where people learned to become more cautious. Having one now would not be the end of the world. Clearly we should not put our long term viability at risk by foolishly stimulating the economy for short term pleasure. That would be a Pyrrhic victory.
...As a nation we lived beyond our means for many years. Thus it is foolish to believe that we can go back to the excesses. We are like a heavy smoker going to the doctor with lung problems. The doctor says, the good news is that there is no cancer, the bad news is that there is emphysema. If the person changes lifestyle by giving up the smoking he enjoys, then the emphysema will slowly get better. But if the person returns to smoking three packs a day………….
For years, we have been counseled to live within our means and to get out of debt.
Here are a few quotes from the Prophets:
From Joseph B Wirthlinin the May 2004 Ensign, "The counsel from other inspired prophets in our time on this subject is clear, and what was true 50 or 150 years ago is also true today.
President Heber J. Grant said, “From my earliest recollections, from the days of Brigham Young until now, I have listened to men standing in the pulpit … urging the people not to run into debt; and I believe that the great majority of all our troubles today is caused through the failure to carry out that counsel.”
President Hinckley had this to say in the October 1997 General Conference, " I urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt to the extent possible. Pay off debt as quickly as you can, and free yourselves from bondage.This is a part of the temporal gospel in which we believe.
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