Mind-Set

The massive deprivation and rationing brought about by World War II left a deep impression on the American psyche. Making things last and saving money for a “rainy day” was viewed by most folks as both necessary and prudent. In order to buy a house, a 20% down payment was typically required. Likewise, substantial down payments were necessary to purchase an automobile or a major home appliance, with most day to day needs paid for with cash. However rampant inflation of the 1970s and a new generation mind-set evolved, leading to the debt driven, consumption culture that exists today.

Over the past three decades American household debt in relationship to income has more than doubled. With debt fears assuaged by rising real estate values. Causing many homeowners to use rapidly growing equity to finance lifestyle enhancements inconsistent with their actual incomes. The end result the housing bust, collective massive debt “hangover” and our current stagnant economy. The answer to our economic malaise, both as individuals and as a nation, is a return to living within our means. As thrift, and the financial where-with-all it breeds, generates the confidence to know we can indeed control our fate.

                                               Roger L. Caron