There is a secret formula for losing weight that works almost 99% of the time and best of all I won’t charge you a dime to give it away. Ready? Here it is… Eat less and work out more! Yes friends it is that simple and it will solve all of your problems. Just eat less, work out more. Still confused? Let me give it to you again but in a slightly different way. STOP shoveling food into your trap and GET OFF the couch to DO SOMETHING. There you have it folks, it is just that simple.
Billions are spent every year on products that claim to do all of the hard work of weight loss for you. Pills, machines, solutions, tonics, shakes all in the pursuit of any alternative to eating less and working out more! People will part with hard earned cash because they want to believe there is another way that doesn’t involve self restraint or sacrifice. Losing weight is easy, parting with bad habits is not.
Now consider the core of our current fiscal problems. Banks originated and then sold risky loans to buy other risky loans to getting rich in the short term at the expense of long-term stability. Those loans were given to people who wanted to buy homes they could not afford; who looked only at the monthly payments at origination date with little concern for how interest or the cost of maintaining those homes would affect them in the future. In short everyone ate more and did less and got fat from it.
Just as you do not eat a hamburger and suddenly gain five pounds you don’t take on a bad loan and instantly drown in debt. It takes time and the repetition of the same bad habits. Consumers would get a loan they couldn’t afford for a home and follow it with a credit card balance they couldn’t possibly pay back. Lenders wouldn’t just give one bad housing loan they would bundle them with others and repeat. In the short term everyone was happy; waistlines were expanding but like the rich taste of junk food these bad loans left everyone feeling full and content.
Now go back to the principal of eat less, work out more. If both sides had simply lived by a basic principal, buy less & save more, this situation could have been avoided. Both sides were driven by greed and a lack of fiscal restraint. Payments by individuals on these bad loans would go almost entirely to paying off the interest and never the principal. This gave lenders what appeared to be endless streams of revenue. The problem in such a system is obvious, if a principal is never paid the individuals eventually get locked into spiraling debt and they cannot take out more credit to purchase goods or services let alone make the payments they owe. What credit they eventually do receive is often used to pay off the interest of other debt. It creates a feedback loop. Without new individual consumers to receive loans and without old customers paying, lenders have no new money. Without money on hand to lend businesses have less access to credit and without consumers buying new products they have nothing to live off of.
For lending to work properly individuals and businesses must eventually pay off the principal of debt. In such a system a modest interest rate that is affordable generates revenue for lenders that they can use to lend and generate more loans. Once principal is paid a consumer can then take out a new loan to purchase more from businesses who need to pay off their own loans and interest. By relying on exorbitant interest rates, lenders were biting the very hands that feed into this system; deciding to chase short-term gains instead of long-term riches. Consumers too chose homes and loans they could not afford rather than investing wisely into what could become nest eggs or short-term loans to purchase big ticket items they would eventually own. Now both are looking for solutions that only exacerbate the problem. Neither wants to eat less or work out more, they want to continue to live in homes they cannot afford and reap profit from loans that have no real value; instead they want taxpayers who consumed responsibly to pay the tab.
A similar principal exists in government which spends far more than it receives and makes promises to fund more than it can spend in order to court public approval. The promise most often offered by politicians to get elected is that they will not raise taxes. The public clamors for politicians who lie just as they consume loans they cannot afford. Politicians refuse to live within the public’s means because the public demands it.
Throughout the 2008 campaign almost every politician, including John McCain, was selling the “eat more, work out less” model and the public largely accepted the politicians promising the most return for the least investment. Meanwhile TARP, the Stimulus and Obama’s newly unveiled mortgage plan all rely on the “eat more, work out less” vision of order that will certainly be a recipe for disaster and feed our addiction to live beyond our means.
In short, our entire nation is embracing a solution to our problem that is the problem itself. Unwilling to accept even the slightest amount of discomfort in the short-term, voters and politicians and business have all gathered around policies that will bankrupt future generations and lead to further economic devastation. All to avoid the slight discomfort of sacrifice, whether it be loss of a home, a car, or the collapse of aging and inefficient business and government that produce jobs that are widely not needed. We are eating more and working out less and wondering why we’ve gotten so bloated.
For a similar thought see Yes the Medicine tastes bad
