This nation thrives by buying everything using credit. It’s the plastic! Credit cards have become part of our economic system.
When we shop at Sears or Costco or Walmart we are barraged with the “buy” mentality. I am just as guilty as the average American. I bought a flat screen TV last January for no money down and no interest charge for one year. After that one year I will be charged at the rate of 24% for the balance due dating back to the original purchase date. Why did I do that purchase? Every time I went into Costco to buy staples (e.g. bottled water, chicken, cleaning supplies) I walked by the flat screen TV display. I could not resist temptation.
All my friends say they pay their credit card bill every month in full. I don’t believe them! They are just ordinary people. Perhaps slightly more well off than most but the evidence convinces me that at least some of them are not entirely truthful. In September 2006 the amount owed by consumers on revolving debt exceeded $850 Billion. A year later, this past September, the amount owed had risen to almost $925 Billion. The source of this data is the Federal Reserve.
Why is this happening? The United States is a consumer nation. As individuals we have decided to buy everything we want regardless of our ability to pay for those items. The most recent glaring example is the purchase of homes with little or no down payment.
There is a positive side to this behavior. Americans have very comfortable life styles. We have a history of being the biggest consumers in the world. The Canadian Broadcasting Company did a report in February of 2005 informing us that China has surpassed America < http://www.cbc.ca/story/world/national/2005/02/16/china-consumption-050216.html> in the first years of this century in most buying categories.
I am a prefect example of the spoiled American. We have two cars, cell phones, multiple television sets, two computers with two printers, stereos, washing machines for clothes and dishes, etc. etc. etc. Unfortunately many of these items were bought on credit.
Consumption taxes or value added taxes will never become part of our nation. They would defeat our consumerism. They would reduce the consumption that makes our nation thrive. That would result in less jobs and a lower standard of living.
Oh, by the way I did disappoint Chase Credit Card Services. You see I did pay the last part of my purchase of the flat screen TV in December. It took me 11 months to pay for the TV without an interest payment. Chase immediately called to ask if I would like a new credit card with a special cash back feature. No thanks, I already have three other cards and I will soon have zero balance on each.
Coast Contact 