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ECONOMIC MELTDOWN If you add together all the money that heavyweight prize fighter Evander Holyfield, pro football quarterback Michael Vick, and NBA star Latrell Sprewell earned over the course of their professional careers, you would discover that they collectively grossed upwards of half a billion dollars. And now, according to published reports, all three are in the throes of bankruptcy and struggling to make ends meet! And they are not alone. According to a recent study in the Toronto Star, roughly two out of every three NBA players will join their sad ranks within five years of retiring. While professional athletes undoubtedly face many temptations that the rest of us will never experience, they do exemplify a fundamental law of economics that applies to all mortals: Anyone who consistently spends more than he makes, no matter how high his income, will ultimately go broke. What is true of individuals is just as true of societies. No nation can continue to live beyond its 
means indefinitely. If we, as a people, consistently outspend our income
year after year, sooner or later the chickens come home to roost, the
bills have to be paid.Our nation is currently going through the worst economic crisis since the Great Depression, and there is no shortage of villains to be punished. Greedy and dishonest Wall Street whiz kids? Lock ‘em up. Venal, self-serving politicians? Throw the rascals out. Manipulative CEO's and unethical bankers? Fire them all. Clearly our financial system is overdue for a serious housecleaning. But once the crisis has been addressed, and the economy settles down, it might be instructive to note another contributing factor to the financial mess we’re in. Last year the Commerce Department reported that the average American savings rate for all of 2006 was a negative 1 percent. What does that statistic indicate? Put most simply, it means that far too many people spent all the money they earned and then some on the latest trinkets and toys. Oh, one other thing: it was the worst savings rate since 1933 – i.e., since the Great Depression. I realize there are financial stresses in the larger economic system that must be addressed: out-of-control health care costs, the spiraling price of gasoline, and even depressed wages due to competition from low wage workers overseas and illegal immigrants in this country are all no doubt contributing factors. But I also know that in the past few years I have observed American consumers on an unparalleled buying binge: like the rich fool in the parable told by Jesus in Luke 12, they have been tearing down their barns to build bigger ones, heedless of the future. I have seen individuals spend such a large percentage of their income on “McMansions” that they could not even afford furniture to fill the new rooms. I have counseled with individuals who had financed a lavish lifestyle with plastic, only to find themselves deeply in debt. In fact, the average household debt (including mortgages) has exploded from 103 percent of personal disposable income in 2000 to 139 percent last year! Clearly it is not just professional athletes who have been on a shopping spree. I am not a professional economist, and do not pretend to understand the esoteric concepts of high finance, but I do know this: the painful financial crisis our nation is currently experiencing will be repeated in the future if we don't use it to learn how to live within our means. Perhaps it is time we dusted off our Bibles and read anew the solemn warning of Jesus: “Be on your guard against all kinds of greed: a man’s life does not consist in the abundance of his possessions” (Luke 12:15). –Dan Williams |
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