Can You Spend Your Way Out of Debt?

It’s has happened so often that it's becoming a cliché. A talk-show journalist, interviewing a Republican about budget issues, will always ask: But where will you cut?

You would think that these journalists are suffering from an advanced case of castration anxiety.

Not to be too Freudian about it, but many people understand the current financial crisis in terms of one or another narrative. We would do better if we also understand that narratives never tell the whole story.

Ethical principles, society’s core values, must count. More so now that the values we have been maintaining for the last few decades have now been proven to be unsustainable.

Take the narrative: Your child spends too much money and he calls on you to bail him out. If you say Yes, you are indulging his bad habits. If you say No, God knows what he might do to himself.

The good news is that every American has come to the belated realization that Ben Franklin was right about the value of hard work and thrift.

How did we lose touch with the old value system? Simply, the mental hygiene profession decided that hard work was self-destructive and that thrift was just a euphemism for repression.

It told us that happiness and good mental health depended on our ability to enjoy a life of leisure while spending our resources freely. By resources, the therapy culture meant your emotional and sexual resources.

Along with thrift, discipline became an obscenity. Thus, in the minds of television interviewers, fiscal discipline, to say nothing of the dread austerity, is simply going to immiserate the nation.

And this is not entirely wrong. Everyone knows that you cannot spend your way out of debt. You cannot keep borrowing on the chance that your credit line will hold up long enough for you to continue to keep making your payments.

And yet, going cold turkey on a spending addiction is not going to make you happy.

You may want to teach your child responsible behavior, but you would probably not cut him off completely and risk seeing him doing something drastic and irreparable.

Besides, if your child is profligate and intemperate in his spending habits, whose fault is it anyway? How many parents will rescue their children from their errant ways because they, the parents, feel responsible for not having taught them, the children, good behavior.

And how many of them will simply not be willing to risk what might happen if they say No. A child who cannot pay his debts might become homeless, might commit suicide, might rob a bank, might start dealing drugs, or might prostitute himself.

Call it tough love if you like, but a parent who gives in when faced with those possible outcomes is not being a moral sellout.

It’s a good thing to be against bailouts. From a moral perspective, they are clearly a step in the wrong direction. And yet, when it’s your child, and the alternatives are horrifying, which set of parents would simply say No, nothing… do your worst.

And yet, many parents do arrive at that point. After having their generosity abused repeatedly, they arrive at the last recourse… treat the profligate son as an adult and cut him off.

This will force him to learn responsibility the hard way. It will offer him a lesson in good behavior that he will long remember.

If he survives it, that is.

All of this to say that either our leaders will find moral virtue on their own or the markets will impose it on them.

We have lost track of the old virtues, of discipline and thrift, of earning your way and working for what is yours.

Our fiscal incontinence is hardly limited to the government. Household balance sheets are in a calamitous state, too.

This could not have happened if we had not, as a culture, decided that debt was not such a bad thing, because it could be redeemed by the joys of spending.

Express all your feelings, we were told, even if they are not really your feelings. More at home on stage than in the real world, therapists have been teaching people to emote on cue, to feel the feelings they are supposed to have, to feel the feelings that might be appropriate for the role they have adopted.

Just because you can throw yourself into a paroxysm of rage does not mean that the anger is really yours. If it has not arisen within the right context, then it is pure theatrical display, a form of emotional incontinence.

But once such displays become their own reason for being, once we all come to believe that expressing our feelings will produce some kind of emotional equilibrium and enhanced mental health, then we lose complete track of whether we can afford the expense.

By that I mean that we will not be trying to suit our emotions to the real world of our relationships. When our newfound willingness to let it all hang out seems to undermine our relationships we will double down, express ourselves more fulsomely, and turn ourselves into perfect drama queens.

Eventually we will be alone and isolated, self-absorbed and self-involved, having racked up a string of debts to all of the people we have offended and insulted. We will find ourselves surrounded by the rubble of the relationships we have destroyed and the pain we have inflicted on those who have cared for us.

Once you get to that point, the point where you have not just run out of money, but you have run out of other people’s money, you are going to have a very rude awakening.