Paying the Piper

by Craig Bernthal

Private Papers

Temperance is not high in the current list of American virtues. We are the 9th most obese people on earth, according to the World Health Organization, with 74% of American’s over 15 identified as overweight.On the expressway, hulking pickups and humvees blast by sports cars. Consumer debt at the end of 2007 stood at 2.5 trillion. Total public debt as of February 2008 was about 9.3 trillion; add in unfunded Medicaid, Social security, and other government promises, the debt rises to 59.1 trillion.

Over the years, one of the main arguments about why we should not take this seriously is that we owe the money to ourselves: it’s all in the family, so to speak. But this is less and less true. Out of all the U.S. debt instruments held by states, corporations, individuals, and foreign governments, which totals 5.3 trillion, 25% is now held by foreign governments, nearly double the percentage held in 1988.

Chalk this all up to our buoyant characters and national exuberance. There’s nothing wrong with living large in America. In fact it may be un-American not to.

A Generation of Savers

It was not always this way, however. My grandparents bought their first and only house for $3,000 from an elderly relative whom they agreed to care for as part of the bargain. Their small home included twenty-five acres of farm land in Frankenmuth, Michigan. They didn’t have a mortgage, and they didn’t buy anything on time.

My grandfather went from being a milkman to a self-taught tractor mechanic during the depression. They had no consumer debt because they weren’t consumers. They seldom bought anything, as far as I could tell, except groceries, and their huge garden produced a lot of what they ate. They never gave the impression they lacked anything — quite the opposite. In fact, we never knew what to get them for Christmas or birthdays.

When they wanted to save money they put it into the bank or savings bonds. They thought it was not only smart to save, but patriotic. When my grandfather died 1986, his estate was worth about $200,000. (My grandfather’s parents, who had a more exuberant idea of how life should be led lost a beautiful farm on the Cass River through overspending. It was the saddest event of my grandfather’s life.)

My father moved more into the consumer culture as his small town optometric practice developed, but he paid cash when he built the house I spent the second half of my childhood in. It was built in 1962 by Clyde Tetreau, all brick and solid as a bunker. It cost $45,000. Dad had to cash in stock to buy it; he was the first person in his family to own stock. Outside of work, and before he bought the house, the principle occupations of my father’s life were bowling, fishing, Lion’s Club, and the Lutheran church. Later, bowling and fishing gave way to golf. Of these, the Lutheran church probably cost him the most money. He liked to read and had some books from Time/Life and an Encyclopedia Britannica. Other than that, he spent almost nothing on himself, but was remarkably generous to others. He read U.S. News and World Report at the kitchen table and fulminated against the national debt and inflation.

Today’s Debtors

This is where the story of Bernthal family financial probity comes to an end, for I became an enthusiastic and sometimes queasy contributor to the consumer economy as soon as I had the chance. I have carried big credit card debt at times, but not often out of necessity.

We baby boomers and our children have been convinced not only that things will make us happy, but that we deserve them. Well, some of the things we buy do make our lives better, but the saturation point is reached quickly. And as for deserving dinner at a nice restaurant or a flat screen TV, well, that’s just ridiculous. Maybe we deserve it if we’ve earned the money already and the rest of our obligations to family, church, charity and the future are covered, but how many of us can say that?

I live in a development built about five years ago. The largest model is bigger than a small motel and rather looks like one. New pickups and SUVs sit in the driveways.  Some people park boats the size of small destroyers on the curb, and few are the backyards without swimming pools. This is a middle class suburb: school teachers, policemen, carpenters, mid-level business men and administrators live here, not doctors, dentists or lawyers, who occupy the next subdivision over to the east. Now, the for-sale signs are starting to go up, and there are already a few unoccupied houses. (When we bought here, the developer suggested we might buy two: one to live in and one for an investment.)

When the Piper Comes to Knock

We have been on a collective national binge. We could have been working on energy independence since the first energy crisis of 1973, but we didn’t. We could have applied the brakes to federal spending over the last eight, but we didn’t. We could have ignored the nine phone calls per day to take out second and third mortgages and the stack of credit card offers that came in the mail every day, but lots of us didn’t. Lack of consumer confidence is now quite the opposite of our real problem, which has been long term consumer insanity.

The piper now waits to be paid, and all the economic rationalizations about why we can spend more than we take in, the stimulus package, and all of Ben Bernanke’s moves, are going to dissolve in the face of a deeper reality. No individual and no culture can flout the virtue of temperance without a reckoning.

Craig Bernthal is a professor of English at California State University, Fresno.

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