In the days and weeks following 9/11 Americans became – very understandably, in my view – a bit skittish. We stopped buying stuff. We did it to such a degree that one radio talk show host in my city observed that the national economy was in danger of severe crisis. He used his platform to urge people to go out and spend money.
One may say, in fairness to this gentleman (whom I respected for his intellectual honesty, as far as that could be measured from what he said on the air), that he was attempting to be a voice of reason, and to help people navigate the roiling waters of our world immediately after the Towers were destroyed. He did not want to encourage panic; he did what he could to help Americans survive and thrive.
I was on the other side of that boat. I believed that it was lunacy to be worrying about something as irrelevant as the national economy when we did not yet even know when or how or whether the next attacks may come. I considered it an act of prudence to pause, as it were, in our relentless consumption. We should see just which way the wind was blowing before we act like nothing happened.
I concede that in the long run, Mr. Radio’s advice was very good. Indeed in retrospect he may have been far more wise than I might have been able to see in 2001. For better or worse – and I would still say the latter rather than the former – our economy is utterly dependent upon spending. Spend spend spend. We need this because we have built our economy by mortgaging it. We borrow money to make the goods to sell today and not tomorrow, and we need buyers to purchase those goods as predictably as possible. Because we are going to keep on doing the economy the same way. If buyers stop buying, then sellers lack the revenue they need in order to make payments on yesterday’s loans and to secure the loans that they need for today’s manufacturing of tomorrow’s goods that they need buyers to buy.
So: we must spend. And that is what Mr. Radio counseled. I objected in principle back in 2001, but given our economic circumstances both then and now, the repercussions of an uncertain future were and are fairly serious for us. Fortunately for the USA, people followed his strategy rather than mine, and we were able to get back on our feet much more quickly. In principle I would have said (and do say today) that a debt-based economy is a Bad Thing, but if that is where one finds himself he would be wise to take those circumstances into consideration. A national disaster is a really lousy time to preach ideological purity.