Sorry, but I’m not going to fall for the election year pandering this time.  I graciously and gratefully accepted the first stimulus check – it paid for my bike and helped pay down my car loan – but we certainly didn’t need it.  And now the Democrats are saying the first check didn’t enough to help the economy and they want to start working toward a second stimulus payout.  Unfortunately no amount of “stimulus” can help our economy right now because a check will only patch the symptom but won’t help cure the cause.

Americans grew addicted to debt over the last decade.  Consumer debt rose to record highs and the nation’s savings rate fell into red.  We were lured in with “easy money” from credit cards and unrealistic home equity.  We became attached to our ability to buy beyond our means and never built a support structure for the day when it all fell out from under us (and it has).

The first check did some good by allowing the smart consumers to start eliminating the cancerous debt.  Although we were encouraged to spend it mindlessly (only perpetuating the disaster of the previous decade), many did the smart thing and used the check as their first step toward financial freedom. But while the educated consumer started helping themselves, the old, decayed economic structure kept crumbling around them.

The pain we’re feeling right now is systemic. It’s not something that can be easily remedied and there’s nothing that average Joe Consumer can do about it.  Companies have taken on far more debt than they can possibly handle and the Fannie Mae/Freddie Mac disaster is evidence of that.  Together, the two big players in the US mortgage industry have underwritten or own more than $6 trillion worth of mortgages and they’re struggling under the weight of bad debt.

The situation has gotten bad enough that there is little more we can do to “help” ourselves since most of the help we would provide would be to further prop up a failed economic model. As I wrote three months ago, our best hope for salvation at this point would be born of the changes a recession would force upon us.  Things are going to get worse (maybe much worse) before they get better and no amount of politically-motivated money thrown at the consumer will fix that unless the powers-that-be start making real changes.

We don’t need the government to borrow from our grandchildren to buy our votes today; we need them to get their act together, work together to come up with a real plan for real changes, and then have the guts to actually put effective change in place instead of pandering to special interest while placating us with meaningless buzzwords. We don’t need them to bail us out of the hole we collectively dug for ourselves; we need them to help us keep this from happening again by helping build a sound economic plan that does more than put short-term fixes on long-term failures.  We don’t need the government to save us; we need to save ourselves through smart saving and less consumerism.

So, thank you for the “concern”, O duly elected representatives, but no thank you.  We don’t need a Band-Aid; we need radical open heart surgery. Please keep the money we’ve given you so far and, instead, implement the same changes at the government level that your constituents are making at home: spend wisely, cut unnecessary expenses, and prepare for the long haul.

Other takes on the same subject:

• Say No To A Second Stimulus Check
• Another stimulus check? Maybe, but why not just create your own?

Photo credit: The Joy Of The Mundane

(c) 2007-2009, That One Caveman, http://www.thatonecaveman.com

A post on Frugal Dad this morning about the tax rebate got me thinking about how hard it is to not go out and spend it like a “good little consumer.” Every now and then, I get this nearly uncontrollable urge spend. It’s usually triggered by a large purchase or an unexpected influx of money – both of which have just happened in my life. I start thinking about the nice things that I want or (believe) I need and, before I know it, I’m hitting craigslist, eBay, Amazon, or Newegg depending on which itch needs scratched. There are a few things that have been tempting me lately that I know I don’t have to buy just yet, but know that tax rebate is just around the corner only turns up the heat…

I’ve been thinking about dropping my gym membership since I haven’t been using it. I’m reluctant to do that, though. I signed up when the gym was just opening and offering membership at 1/2 the normal cost. I’m paying less than $30 a month whereas everyone else is paying at least $60. But I know that even if I’m saving money relative to all the other gym members, I’m still spending $30 a month – $360 a year – with no real benefit to me. But if I’m going to drop the gym membership, I need to still get my exercise.

Because my knees aren’t that great, I love working out on an elliptical. I would love to purchase one, but I know that a good one will set me back a great deal of money – way more than 1 year’s worth of gym membership time. But if I had an elliptical in my basement I know I would exercise more since I could just drop whatever and go downstairs. Having to drive 15 minutes just to go work out in a large enough impediment that I just avoid going to the gym altogether. I would love to purchase one, but it just doesn’t make sense right now. Besides that, I need to teach myself to stick to my goals and decisions. I already decided the rebate will go towards paying off the car and I need to make sure that’s what happens with the money.

I’ve also thought about getting an Apple computer for use in my consulting business. I’ve never owned one or even used one since the Apple IIe, but the allure of a shiny new piece of computing equipment stirs up that “funny feeling” inside. It would be very nice to use a Macintosh for doing web design work and being able to test websites on both the PC and Apple platforms, but again I have to make myself wait. I had to remind myself that if the business could use equipment like that, the business will have to buy it. I’m going to earn myself a Mac instead of buying one just because I think I need it.

I know I can’t be alone on this. Have you run into the seemingly-uncontrollable urge to splurge? What do you do or tell yourself that helps reduce the desire to spend?

(c) 2007-2009, That One Caveman, http://www.thatonecaveman.com

Before my wife and I were married, we inherited a washing machine from my parents. It was sufficient for our needs; it cleaned clothes well enough and it wasn’t too loud. Occasionally it would rock a bit, but it never started its own marching band.

Our faithful mechanical servant has lived through a lot – far more than the average washing machine. Before we acquired it, it saw two moves; and in the last seven years we have owned it, it has weathered five more. Unfortunately, each move aged the washer and wore it down.

When I came home from work this past Friday, it finally gave me notice that it was tired of its duties and wanted to retire. But, following in the spirit all of my temperamental equipment seem to exhibit, it didn’t just quit. No, that would have been too simple. Instead of just quietly dying and refusing to do another load, my washer decided to lock me out of my house!

Our laundry room is situated in what could be considered a “mud room” off of our garage as you enter the house. It’s a place where it’s easy to strip down if you’re dirty so you don’t track your filth through the house. And it’s also the place where I enter the house after I return home from work. But on this particular afternoon the door simply would not open. It was unlocked and it did move in slightly, but I couldn’t push the door past the jamb.

Defeated and my calls for assistance failing to reach my wife’s ears, I pulled my keys back out of my pocket and trudged to the front door. After finally gaining entry to my house, I headed to the laundry room to find what prevented my ingress. What I beheld was my washing machine defiantly pinning the door closed after walking nearly a foot to accomplish its goal, straining against the various cords and tubes that connect it to its electrical life source and the plumbing. It was a marvelous scene and I now wish I had taken a photo for proof of the malevolence of this particular mechanical beast.

Now my wife and I have determined we must replace the aging washer, but we certainly do not want to dip into our emergency savings unnecessarily. The washer still cleans clothes, we just have to make sure we’re sitting on it before it enters a spin cycle. And it’s not like we hadn’t thought many times before about replacing it. While the washer was sufficient for our needs when we were first married; now that we have a child, the low capacity and relative inefficiency of the washer is costing us a great amount of time and money.

So now, instead of using every penny of the anticipated tax rebate (if it ever comes) to help pay off our car loan, a great majority of it will now be used to buy us a larger, more efficient front-loading washing machine. It may cost nearly $1000 up front, but I believe the long-term benefits will definitely outweigh the short-term cost, especially since we do not plan on moving again for a very long time. I just hope we can last until this supposed rebate arrives…

(c) 2007-2009, That One Caveman, http://www.thatonecaveman.com