Soldiers and Shoppers Hit the Wall: Expensive soldiers, exempt shoppers no longer sustainable

[DeepModem Mom]

NYT op-ed: U.S. Soldiers and Shoppers Hit the Wall
By ROGER COHEN
Published: January 21, 2008

Wars in Afghanistan and Iraq have pushed the U.S. armed forces to the limit. Many soldiers have scarcely seen their families in recent years. But a much larger American army, the one that's spent this century shopping, is even more overextended and its pain is now coming home to roost.

Nobody ever made money exhorting people to save. But U.S. banks and financial institutions have spent huge amounts in recent years telling people debt is good and savings are dumb. Their ads - to the effect that "good daughters go into debt to take their mothers on vacation," as Elizabeth Warren, a Harvard law professor, put it - paid off handsomely as consumers went on a debt-financed shopping spree.

Consumption has driven the U.S. economy; the only problem is consumers ran out of money years ago even as they did not run out of credit cards. And here we are, with the rainy day our grandparents always droned on about appearing in the form of a deluge, and no savings stashed for it, and President George W. Bush, the debt-spender par excellence, conjuring up a $150-billion stimulus package that evokes the injection of steroids into a prone athlete wrecked by a marathon. This "shot in the arm," as Bush put it, may dampen a little pain. But this patient will be in intensive care for a long time.

As Stephen Roach, the chairman of Morgan Stanley Asia, said to me: "The very low U.S. savings rate, and related huge balance of payments deficit to attract funds from overseas, are not sustainable things." The adjustment is likely to be long and painful.

Think of it as getting the sacrifice of U.S. soldiers and the obliviousness of U.S. shoppers a little more in sync. The non-relation between expensive wars and exempt non-warriors, a mirage Bush has fostered, has become unsustainable....

http://www.nytimes.com/2008/01/21/opinion/21cohen.html?em&ex=1201064400&en=e7f127ada05a9485&ei=5087%0A

[tanyev]

1. Not to worry.

Our commander in chief will give us an inspirational speech on January 28 in which we will be implored to use the money from his stimulus program for an all out shopping surge.