In case you missed it, below you will find a link to President Obama’s press conference from yesterday evening.
As I listened to the post press conference coverage on NPR’s Morning Edition today, Steve Inskeep interview economist Rosanne Altshuler who asserted, among other things, that Obama’s promised tax reform is quickly being left behind. (I, for one, think the president is doing a great job of wading through an incredibly challenging set of circumstances at the very front of his time in office. Drastic times call for drastic measures.)
In another part of the interview, Altshuler explained the intention behind the most recentl stimulus package that effectively puts around twenty additional bucks into most people’s paychecks rather than sending each household a one-lump-sum check. She described that, because Bush’s recent stimulus package largely resulted in folks banking their checks and not re-routing that money into the economy, that the Obama administration is hoping that folks will take that additional small amount per paycheck and go out and spend it on things like an extra lunch out per week, a visit to the movie theater, books, clothes or other goods for their children, etc. The intention is to get more Americans routing more money back into the economy.
In theory, I get this, but in principal, I don’t. Haven’t we gotten ourselves into this HUGE economic mess because as Americans we fell into an enormous trap of over spending? We have racked up credit card debt we cannot pay, purchased cars and houses we can’t afford and made investments that didn’t make sense. Until the last few months, we Americans had a terrible record when it came to saving. And now, for the first time in years, more and more people are actually slowing down their spending and focusing on starting or bolstering their savings accounts. Isn’t this a good thing? That our economic woes have prompted thousands of people/households to reconsider their spending habits and look to the importance of having a savings buffer to their name? (As a parent, I’d like to think that my children might still have a chance at growing up in an environment that teaches the value of saving, conserving and making thrifty choices.)
So, while I understand the drastic need to address our country’s (the world’s) economic problems, I have to wonder if encouraging folks to return to their spend, spend, spend mentality might not be the best piece of advice our government to be relaying to its people. Shouldn’t we be encouraging folks to save money, spend and consume less, make smart and diversified investments and revisit the idea of how much spending, consuming and over-using is really prudent?
And now…Obama’s press conference: