Americans: Why Are We Working to Build More Debt?

It’s a four-letter word, and one I find almost as offensive as that other kind of four-letter word: debt. And while it should strike fear into the heart of every person, we just keep racking it up.

I heard one example on my way to work that was disguised as an easy way to pay for a LASIK vision procedure. Here’s my recollection of a portion of the commercial script that I found troubling:

Wife: “Go get LASIK.”
Husband: “But we can’t afford it.”
Wife: “Of course we can afford it, they have financing available.”

Uh-oh. Being able to afford something and being able to finance something is not the same thing. As a matter of fact, if you have to finance a product (that great pair of red pumps from the shoe store, a medical procedure such as LASIK eye surgery, etc.) that actually means you can’t afford it. Financing equals debt.

Here’s another alarming trend I read about recently in TIME magazine: according to a new study from, America is working to increase its collective credit card debt by $54 billion in 2011. The article goes on: in 2009, Americans actually reduced their credit card debt and added $9 billion in new credit card debt in 2010.

That means people were being smarter about their spending during the economic recession – or less able to be approved for credit cards. But, either way it means more people were actually living within their means.

I’m not sure where this turn-around from two years ago has come from. Possibly it’s similar to a teenager tasting his or her first bit of freedom after being grounded for a month – Americans are trying to make up for that time locked away without the ability to do whatever they wanted, whenever they wanted.

The TIME article made conclusions that the increase in credit card debt is similar to the subprime mortgage crisis of a few years ago – what many say propelled us into the recession. I’m confident that no one wants a repeat just two or three years later with credit card debt to blame this time.

Getting out of debt is not easy and it’s not quick – but the first step is to stop accruing debt: No more credit cards, no more financing.

So, someday when I get LASIK, I’ll have worked to save the money and will be able to truly afford it – no financing for me, thank you very much. What about you? Are you relying on credit cards and financing or are you working to get out of that vicious debt cycle?

Reason Magazine Takes “Clearer Look” at Health Care Reform

"We have this insane system now where you need health care, you’re the buyer, I’m the doctor, I’m the seller of health care — and somebody else pays the bill. Who the heck is gonna shop for price when somebody else is paying the bill? … I think Lasik (eye surgery) can act as a model for health care reform." – Dr. Robert Maloney

In the video at the bottom of this post, Reason Magazine also makes an interesting case about how, traditionally, the length of time the average worker has had to work to afford certain things in America, from food to jeans to electricity, has dramatically decreased based on competition-induced price drops. They contend, like many, that applying these free market principles to health care would have the same impact.

In contrast, I’ve also heard detractors claim the free market can’t truly work in health care because the seller is the agent for the buyer (meaning the doctor has incentives to peddle certain products to patients for his/her benefit, not necessarily theirs).

At any rate, here’s the video. Where do YOU fall in this debate?

Constitution Scholar Speaks at Economic Club Lunch

Gordon Lloyd, coauthor of three books on the American founding and author of two forthcoming publications on political economy, addressed over 600 Economic Club of Indiana luncheon attendees yesterday.

During his speech, Lloyd surmised the Constitution could be broken down into a four-act drama:

  • Act I – The Alternative Plans (Madison-Sherman’s exchange; Hamilton’s Plan, etc.)
  • Act II – The Connecticut Compromise
  • Act III – The Committee of Detail Report (structure and power of Congress; the issue of slavery)
  • Act IV – The End (the eventual signing of the document)

When discussing the problems facing today’s America, Lloyd makes one point above all else: America’s greatest detriment is the crisis mentality. He contends that patience is often sacrificed when presidential advisors and others panic, and language then turns to "a language of war" — and supercedes cerebral debate.

He also makes the distinction that greed needn’t be part of capitalism, and that self interest is more the goal. Lloyd added that skewing toward socialism will only exacerbate our problems, not end them — a point he made to the applause of those in attendance.

When asked about the role of the presidency, he offered that both Herbert Hoover and Franklin D. Roosevelt were too tempted by progressive movements of the day to grow the presidency beyond its intended scope of power. According to Lloyd, this power has come at the expense of Congress and thrown off the balance in our system.

Lloyd’s web site on the founding of the Constitution is used by schools across the country to teach about the Constitutional Convention and the document itself. Peruse the site here.

The Economic Club’s next lunch will be held on Tuesday, April 7 and will feature education policy expert Lance Izumi. For more info or to order tickets, visit the web site.

“Best Places to Work” Deadline Approaching

Time is running out for companies to apply for the annual competition naming the “Best Places to Work in Indiana.” Registrations will be accepted until Friday, December 5, for the Indiana Chamber of Commerce program honoring the top companies in the state as determined through employer reports and comprehensive employee surveys.

The 2009 winners will be selected from two categories: small to medium-sized companies of between 25 and 249 employees, and large-sized companies consisting of 250 or more employees. (Out-of-state parent companies are eligible to participate if at least 25 full-time employees are in Indiana.)

The Best Companies Group, which has overseen similar programs in other states, is responsible for the selection process. The basis for this initiative is Fortune magazine’s noted “100 Best Companies to Work for in America.”

All participating companies will receive an in-depth evaluation identifying strengths and weaknesses according to their employees.

Election Day 2008 a Big Day for Women

According to the National Conference of State Legislature’s (NCSL) The Thicket blog, Election Day 2008 was not only a monumental day as America elected its first African-American president, but it also proved to be a big day for women in the "Live Free or Die" state:

The New Hampshire Senate has become the first legislative chamber ever to have a majority of women members. Thirteen of the 24 members of the Senate are women.

Nationwide, women held 24 percent of the state legislative seats coming into last night’s election.  Preliminary indications are that this proportion did not change significantly. 

NCSL also notes that in Indiana, women comprise 21 members in the House and 13 in the Senate. That means women make up 22.7% (34 out of 150) of our state legislature.

Chamber VP Supports Literacy Report

A new literacy report from the National Commission on Adult Literacy is being lauded by Indiana Chamber VP Mark Lawrance.

Lawrance explains:

“The comprehensive Reaching Higher, America report is a significant research project with bold recommendations to better prepare our country’s workforce for the 21st century. It urges overhauling and expanding adult education and workforce skills training. That is what the Indiana Chamber has been advocating for in Indiana, as highlighted in our two recent reports on this area (including this year’s Indiana’s Adult Education and Workforce Skills Performance Report)."

Read Lawrance’s full statement here.