A time of reduced expectations
Glenwood Springs, CO Colorado
Let’s face it. The era of the “credit-card economy” is over. It is no longer possible to raise our standard of living by running up credit card debt, expecting to pay it off with greater earnings from overtime pay or wage increases. The reality is many of us are going to have to give up buying whatever we want, whether we need it or not. We may no longer be able to expect to have two cars in the garage, and a new one every two or three years. The days of conspicuous consumption are over for many Americans. And the generation growing up expecting that after working just two or three years they will move rapidly up the corporate ladder to a high-paying executive position (something it may have taken their parents decades to achieve), may find themselves lucky just to have a job.
Many are beginning to realize these realities, and instead of living beyond their means, are cutting back on spending, and are actually putting money into savings for a change.
But a reduction in the demand for goods and services has an unintended consequence on the providers of those goods and services. Technological advances have produced such enormous increases in productivity we have the capability of producing far more than consumers are able or willing to purchase. The response of businesses has been to cut costs by eliminating hundreds of thousands of jobs in an effort to survive diminished demand for their products. But expanding the ranks of the unemployed will further reduce the number of people who can afford to purchase their goods and services, and imposes an added burden on the economy for the cost of unemployment benefits.
Wouldn’t it be preferable if instead of laying off perhaps twenty percent of their employees, businesses accomplished a comparable savings by reducing the work week to four days? That is what I did in my company when we were hit with the recession in the early 1980s. That way, every one of our employees still had a job, and it was easy for us to increase production with an experienced and efficient work force as the economy recovered.
But government also has to adjust to reduced expectations, cutting costs by scaling back hours, eliminating nonessential spending, and trimming the cost of entitlement programs. Military spending could be reduced significantly by adopting a strategy for a leaner force geared for the future, instead of the past. Social Security and Medicare costs, which cannot continue at their present level without bankrupting the country, could be greatly reduced by cutting back benefits on a sliding scale for those who do not really need them.
A situation which is crying for reform is our health care system. The present state of affairs is a disaster. The high cost of health insurance is overwhelming businesses trying to provide for their employees, and as a result 46 million Americans are uninsured because they can’t afford it, either. A universal health care system would provide coverage for all, and would help American businesses compete with foreign companies whose employees’ health care needs are provided by their governments.
But here again, we are faced with a need to reduce expectations. Technological advances in diagnostic and surgical procedures have produced wonders in what can be done, but at a cost we can no longer afford. Just as not everyone can afford a swimming pool or drive a Corvette, we cannot afford to provide everyone with the ultimate medical science is capable of doing. But a basic level of health care for all, especially the millions of children who are now doing without, could be provided at a very affordable cost, leaving high-cost procedures to be covered by private insurance companies for those who choose to purchase them.
We all, including our government, will have to, and can, adjust to an era of reduced expectations ” and be none the worse for it.
Hal Sundin’s column runs every other Thursday in the Post Independent
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