The Number 1 Reason Americans Are Broke
Posted on December 6, 2008 - Filed Under Finance | Leave a Comment
Many finance experts will tell you that the reason that more and more Americans
are going broke is because they are spending too much. This is just wrong!
This article aims to dispel the traditional explanations, and expose the real
underlying cause of Americans going broke.
Experts say that while the cost of living has been rising each year, income
hasn't risen proportionately, and people are thereby losing ground each year.
This sounds like a very plausible explanation, albeit a bit simplistic.
Other experts claim that Americans spending habits have gone all out of kilter, that
the brain must be broken, because there's no other explanation as to why people
are spending way above their income levels.
Most experts assume that debt is to blame. People borrow money without having
the capacity to pay it back, and are therefore digging a deeper hole each year.
For proof, the experts offer up the Christmas season, where people buy presents
that no one will even use, maxing out their credit cards, only to find that it
takes all year to pay them off.
Some experts claim it's credit card debt, high mortgages, expensive car
payments, rising fuel and food costs, divorce, unemployment, even Iraq is to
blame.
If the experts have got this all wrong, then what is the explanation you might
wonder... What is the number one reason Americans are going broke?
Wal-Mart! Yes, that's right, it's good old red, white, and blue, all-American
Wal-Mart!
With more than 1.5 million employees operating 3500 stores, they have created an
economic wasteland in America. If you haven't witnessed first hand the
devastation, take a closer look. Neighborhood mom and pop stores have been
forced to close in droves. Small companies that offered good working
conditions, decent pay, and diversity in products and services are drying up,
thanks to this mega-monster.
Wal-Mart wiping out small businesses is not what's really causing Americans to
go broke. The disposable products are what's breaking the bank! Instead of
buying a pair of shoes for $50.00 that last a year, or two (or more), people are
now buying 2 pairs of $15.00 shoes. Sounds like a deal right? $50 - (2x$15)=
$30. It looks like a savings on paper, hrmm...
However, when you realize that those 2 pair of imported, el-cheapo, shoes are
only going to last for a few months, the math suddenly turns ugly. Tried any of
the flat-pack furniture? Definitely not something you'll be passing down to
your grandchildren. The low prices are only matched by the low quality that
people pay for over and over again.
The bottom line: Would you rather have 10 pair of disposable ______ (shoes,
jeans, socks, etc), that will wear poorly and need replaced quickly, or just a
few nice items that will last and show their worth?
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Hamish MacCurry is a freelance writer and journalist. You can learn more about
money matters at http://www.didyousmellthat.com
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