Unintended consequences

The very notion that we can borrow our way out of the recession seems to be the latest diversion these days, but it is bound to have unintended consequences.

For starters, it sends the wrong message to consumers and businesses in our economy that are already leveraged to the hilt in debt. It sends the message, whether intended or not, that spending profligately beyond our means will ultimately save us from the results of having lived beyond all measure of financial prudence as individuals and as a nation.

It fails to set the stage for a new approach to personal and national fiscal discipline, and instead removes the responsibility for our actions from ourselves to our children or our grandchildren, both of whom we are counting upon to pay the cost of our collective love affair with credit.

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The good news is that a contracting economy is not necessarily a bad thing. Like a drunken sailor waking up just in time to hear the last port call, the effects of a night of binge spending might be wearing off.

The last thing we need is to restore a false confidence in the market, which makes credit widely available to an already spending-drunk population. In fact, tightening our belts, have less access to credit, and being forced to increase savings is a bitter, but necessary, pill that America must ultimately swallow.