2009 Gloom & Doom Update: Overspending and the Global Financial Crisis

There have been lots of articles on what has caused the problem and how it can be solved. An article in the NY Times addresses one part of the cause: over-spending. This excerpt summarizes it brilliantly:

In other words, shopping was part of the problem and now it’s part of the cure. And once we’re cured, economists report, we really need to learn how to save, which suggests that we will need to quit shopping again.

My advice to individuals out there is simple: get rid of your debt before you start to spend on new things. You’re not helping the economy at all if you add to your debt, in fact, you’re making it worse.

The retail sector wants you to spend so that it helps them. That does not mean it helps you!