The credit-card mentality of today

Posted: Wednesday, October 05, 2005

My father was a Norwegian-American. As a child I can remember him chiding me because when I got a nickel or dime, or wow, even a quarter, in my pocket, I wanted to spend it. The expression then was, "The money just burns a hole in your pocket." Then I grew up in the real world. Today I try to save. I even pay off my credit card in full every month.

When I first came to Southeastern Alaska 34 years ago, I wasn't surprised to find out that Petersburg, at that time had the highest per-capita savings of any city in the U.S. I knew about Norwegians as the "last of the big-time time savers."

Today, I see a whole different mentality, a way of handling finances on the individual, family, state and national level. I see us living on a "credit-card mentality." We charge things, we hope to pay for them later. Some people end up paying just the minimum due on their credit card. Then they pay a high interest rate on what remains. I was always taught to "put something aside for the future." As kids we even had little "banks" in which we put our pennies and nickels. When something big came up that we wanted, we could pay for it.

What I see happening now across this nation is entirely different. The State of Alaska has a lot of money coming in from high oil prices, and there are long lines of people ready to tell us how to spend it before it "burns a whole in our pocket." Maybe we should save some of it and make sure that all the things we need for the future - retirement benefits, repairs to schools and civic building, roads, sanitary system and all the rest - are paid up before we spend the largess.

On the national level, the "credit-card mentality" is even more frightening. The nation is in debt to the tune of trillions of dollars! We are borrowing hundreds of billions of dollars from China, Japan, India, Saudi Arabia, simply to pay off our debts for the wars in Iraq and Afghanistan. We're not ready for unexpected expenses like the costs of hurricanes Katrina and Rita. Politicians want more and more "pork" to persuade their constituents that they should be re-elected.

I found out that when a person doesn't pay their full debt on a credit card, the interest charged may rise. What would happen if someday the Chinese, Japanese, Saudis and others simply said, "The U.S. is not a good investment." "Those people have a horrendous debt and are just going deeper and deeper into debt." "It is time to invest elsewhere." ?

I am not a great fan of G.W. Bush, but we can't lay all the blame at the White House doorstep. This whole idea of "spend, spend, spend," "never save for the future," has to stop. As responsible citizens, when we come to vote, we have to consider not just what "benefits" there are, but what are the costs. How much pork, how much "spend it now" in Alaska, will we tolerate? We have to hold our local, borough, state and national representatives responsible, and if they are not, they should not be re-elected.

I respected my father and those old Norwegians who reminded me to "pay your bills on time, save your money, because you never know for sure what's going to happen in the future."

Now, how can we as taxpayers convince others that the "money will not burn a hole in their pocket"? We can all vote and hope that a vote is worth more than a campaign contribution from outside sources.

• Wally Olson is emeritus professor of anthropology at the University of Alaska Southeast.

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