Stolen From the Future

Created:
Wed, 2009-09-23 22:53

"The debts run up in recent years are particularly unfortunate, because they stole resources from the future without laying the groundwork for future growth. If you told me we were spending like crazy to build schools and send everyone to college, that would have infinitely different implications than borrowing like crazy to finance current consumption,” said Christina Romer, an economist at the University of California at Berkeley.

The above quote sums up what I’ve been saying for a long time. Debt-fueled spending today pulls forward the future’s rewards. So we have a higher GDP today, a shiny new car, a bigger house, that flat screen TV, whatever it is -- we have it now. The problem is that we spend tomorrow’s money to have that now. And, here we are seeing that it is tomorrow! Now we have to pay the bill. No doubt about it, paying down our debt will be painful.

However, there are ways to make it less so. The biggest way is to be more productive and more valuable. If your work produces more than you had in the past, then your increased your value and your debt load is relatively less painful.

So what is productivity? Productivity is producing more with less. It’s amazing, but energy efficiency and water efficiency are two areas of tremendous productivity potential. If you air seal your house, then you’re home is now more efficient and the energy you use more productive because you're using less of it to accomplish the same means. If you take a new job closer to your home, then you’re using less gasoline to accomplish the same work – that’s a form of productivity! You can use the gas savings to pay off your mortgage, your student loans, your auto loan, or your credit cards.

As a society, we’ve spent the future in many ways, and now it’s time to pay the piper. Let’s get to it and focus on ways to increase our value to society!