Tuesday, June 10, 2008

The Debt Conflict

That well-known Communist and Socialist Utopian, David Brooks, has an op-ed today asserting, among other things, that our greedy, can't delay gratification debt culture is worse than whatever sexual immorality might be being promoted by Hollywood. This is an interesting conservative twist, certain to leave Christianist scolds and prosperity gospel preachers flummoxed.

And while I agree with Jesse Taylor that Brooks tilts his analysis towards the problems presented by debtors and their insatiable consumer appetites at the expense of, say, the behavior of lenders, I actually think the behavior of consumers and lenders are only tangentially the real threat here.

The real problem I think is that, consumer me-too-ism and unscrupulous lending behavior aside, the economy largely depends on people spending money they don't have. This is the real conundrum, the real conflict our public policies to deal with the debt problem will probably only exacerbate. If the spicot gets turned off in some way, credit tightened any which way, the economy will likely slow. At the same time, unless the debt spiral is lessened, the whole system will ultimately end up crashing anyway.

No comments: