A Culture of Complacency and Entitlement

From a historical perspective, America is still a young nation, yet we seem to have undergone an accelerated cycle of ascendency and decline. After rising from a handful of colonies to the richest and most powerful nation in the world, our country is now declining at an alarming rate under a collapsing economy and a culture of complacency and entitlement.

The rapid rise of this nation was due to a fortunate combination of abundant natural resources, a free market that provided opportunity for everybody, and a strong work ethic that was deeply ingrained in our culture. People immigrated here from all over the world seeking opportunities that uniquely existed here. – They didn’t come because they wanted a handout. There were no handouts. — They just wanted an opportunity to work hard, and to be compensated at fair market value for their industriousness and ingenuity. They were willing to struggle and sacrifice to carve out a better life for themselves and their descendents. That’s why they came to America.

That model worked exceptionally well. America prospered and flourished. We were the first nation ever to have a true middle class. – But then something changed, and we underwent a sudden phase shift from hard-earned ascendency into meteoric decline. What happened to our nation?

I see a direct correlation between the decay of the proud work ethic, upon which this nation was built, and the rise of the credit/entitlement culture. What does credit have to do with a sense of entitlement, or with the loss of our cultural work ethic? Let’s take a look at the moral hazard engendered by easy credit.

When somebody wanted to buy something, but couldn’t afford to pay for it in cash, they used to have to save up for it. Department stores had layaway plans, where a person could put an item on hold while they paid it off. They’d pay a little each month until it was paid in full and, when they made that final payment, they’d go to the store and proudly bring their new possession home. It was very clear how long it took to earn the money it cost to purchase a particular item, and people had to make tradeoffs based on what they could afford.

Then came credit cards. The idea was that you still pay a little every month, but you don’t have to wait until it’s actually paid off to take possession of it. Whatever you want, you can have it now, whether you can afford it or not. And, as long as you make a minimum payment each month, you can keep charging and charging and charging, with no immediate consequences. There’s no longer a clear relationship between what you buy and how long it takes to earn the money to pay for it. And, when you max out one credit card, you get another (usually with a higher interest rate).

According to a recent Wall Street Journal article, the ratio of household debt to income for the average American family is 122% . That means the average American family spends 22% more than they earn. Clearly, that is not sustainable for even one household – let alone an entire nation. Most Americans are maintaining a much higher standard of living than they can actually afford. And now that the credit market is tightening up, they will no longer be able to sustain it. Inevitably, most of these people will see themselves as victims because they feel entitled to the standard of living to which they’ve become accustomed, — even though they’ve spent most of their lives living way beyond their means.

Some blame the credit crisis on the lenders. That conveniently absolves individuals of taking responsibility for their own actions, and further promotes the entitlement mentality that got them into this untenable situation. To reward the “victims” by bailing them out at other people’s expense further compounds the moral hazard.

A recent publication by the Bureau of Labor Statistics says that almost 43% of Americans don’t even have a retirement savings account. Among those who do, the median amount of their retirement savings is $2,000. That won’t go very far these days.

It used to be part of the culture that everybody set aside a portion of their income, throughout their earning years, to save for their retirement. People routinely sacrificed conveniences and luxuries to build up a “nest egg” so they wouldn’t have to live out the remainder of their lives scraping by at a bare subsistence level. Regrettably, it seems that is no longer part of our culture. Since the Social Security program was introduced during the Great Depression, the subsequent generation of baby boomers never felt it necessary to save for their own retirement. After all, Daddy Government had relieved them of that responsibility by deducting money from every paycheck and setting it aside for them. So why should they bother to save?

Social Security is now officially projected to run out of money by 2037, and it could be a whole lot sooner. So what will happen to all these people who spent their entire lives living beyond their means, who have no savings and no retirement income? They will face a devastating reality from which they’ve been shielded all their lives. They are not entitled to the standard of living to which they’ve become accustomed. Daddy Government is broke, and cannot come to their rescue.

At least they’ll have fond memories of all the lattes, junk food, trinkets, and fads on which they squandered their money instead of saving for their retirement.

But how were they supposed to know? Everybody else was doing the same thing! – And that’s exactly why our once-great nation has fallen into bankruptcy, financially and morally. Because everybody was doing the same stupid thing, and it never occurred to them that they’d someday have to take responsibility for themselves.

 


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Published in: on August 19, 2010 at 10:18 pm  Comments (14)  
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  1. A well written piece, as always.

    No mention of fraud, greed and corruption?

    And what is a fair market wage for “hard work?” Some people complain even about minimum wage. It seems to me that what some think is a fair market wage leaves the worker with too little money to buy anything that society produces. Which makes me wonder? Who will be the all-important consumer to drive the consumption model?

    • According to the United States Supreme Court:

      The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.

    • “No mention of fraud, greed and corruption?”

      IMO, the entire article is about fraud, greed, and corruption. Using credit to spend 22% more than you earn is a form of fraud. Feeling entitled to spend more than you earn is a form of corruption. And living beyond your means is a result of greed. This article is about the cultural loss of a sense of personal responsibility. It’s become part of our culture and it’s become part of our identity. Looking for a handout (and feeling entitled to one) has become part of our national identity and it is digusting and it is destroying us.

      • “Using credit to spend 22% more than you earn is a form of fraud. Feeling entitled to spend more than you earn is a form of corruption. And living beyond your means is a result of greed.”

        QFT.

  2. Nice article. What we, as a people have done with credit, the government has exceeded tremendously, and we the people, will be paying for that, for a long time.

    • That is absolutely true, Will. But I think the credit/entitlement culture that permeates our nation is why we have allowed our government to get away with mortgaging the future or our nation. Instead of deficit spending being considered dangerously and fundamentally wrong, it’s considered normal.

      I think government policies are largely responsible for this change in our culture, which in turn, tolerates more and more government excess. It’s a vicious cycle that must soon come to an end, because our government is maxed out on credit and still spending like a drunken sailor. This is no more sustainable for a government than for an individual or a household and we will all soon have to face the consequences.

      • “Instead of deficit spending being considered dangerously and fundamentally wrong, it’s considered normal”

        …since about the 1980s, when Reagan started a failed experiment in trickle-down nonsense.

        “I think government policies are largely responsible for this change in our culture”

        …and I think your opining for a time that really never existed in the first place. Credit card use (for use at specific outlets only) originated in the USA way back in the 1920s. The very first universal credit card, accepted by a variety of establishments, was issued by Diners’ Club way back in 1950.

        “It’s a vicious cycle that must soon come to an end, because our government is maxed out on credit and still spending like a drunken sailor. This is no more sustainable for a government than for an individual or a household and we will all soon have to face the consequences.”

        Once again, you’re making an assumption about debt that isn’t true. The federal govt. can do two things that you, I, or any company or state/locality that we know of can’t do…legally print money & go to literally any financial institution in the world & ask for virtually any amount of money at whatever interest rate that they (our federal govt. that is) want & get it without any collateral. Our nation has sustained a much larger burden of debt (as it relates to GDP) in the past, and it will do it again. SS can be saved for many generations by making a few simple changes to it. Our national fiscal house can be put back in order again just like it was in the 1990s under Democratic leadership. The sky really isn’t falling after all…again…ugh…

  3. NYD,

    Good to see activity on this board again. I think the credit card mentality has taken a big hit during the Obama Recession. I believe it will be a long time before people repeat the pattern of maxing out their credit cards. And since the price of homes has
    decreased, home equity loans to take that big vacation are not the option they were four years ago.

    There is a lot of cash sloshing around looking for a home. Unfortunately, because of the Marxist brothers, Barry,Harry, and their sister Nancy running this Country into the ground, that investment money refuses to go where it is needed. It’s going into mattresses and gold. After spending hundreds of billions that they debased our currency to create, their Keynesian experiment is a bust. They always use the Iraq war deficits to justify wasting nearly a trillion dollars and getting nothing for it. Worse yet they have put more structural deficits into the system, just when we could not sustain the existing ones.

    Anyone who believes that Obama has not run up a catastrophic debt or that the Democratic Party is even capable of managing the looming Social Security, Medicare crisis, along with a bad economy, is living in the same fantasy world as the voting public of 2008.

    If the current polls are accurate, America has also reached the same conclusion.

  4. I am only 28 but have been debt free for about 3 years now. I live and always have lived way under my means. While everyone else partied squandered, I stayed at home.

    I owe this mentality to my mother.

    however, the weird part of this is that my mother is a devout Democrat and a strong supporter of Obama. She doesn’t and never has personally had the “credit card mentality” but yet she justifies it on the national level with fervor.

    I guess it is a case of the Lemmings… everyone else says that it is OK (or even needed) so it must be OK. The Keysians have done a magnificient job in training people.

  5. Also, I see that there are still ninnyhammers running around here talking about and endorsing and promoting fiat currency of the government. And as for SS, forgetting the fact that the SS program is based on appropriation and at any time the government can simply vote to not do it any more. Of course, facts are irrelevant to some.

    (I can’t believe I’ve stayed away for this long. People as such really make me laugh, especially seeing as how they debate and and truly believe what they say)

  6. Kyle,

    I have relatives that lived through the 1930s. They worship FDR. They will go to their graves voting solid Democrat and that’s that.

    We have to win the battle for the minds of younger people. A lot were bought off by “free healthcare”. They have to be persuaded that nothing in life is “free”. I know a lot of unemployed college graduates who need to be shown that they traded the job they don’t have for their “free” healthcare.

  7. Funny how Mr DumbGuy says the nation has sustained a larger debt to GDP ratio than we have now. He’s right, it was during WW2. If you don’t count that then it has never been this high
    http://www.usgovernmentspending.com/federal_debt_chart.html
    Thankfully Obungler is more interested in golfing than governing, and the bums in congress are about to get thown out. The bleeding is about to stop. The next government just need to show the above graph, pick a nice target ratio, say 30%, make that law, and start cutting! They will have my full support! and probably the support of all the corporations which are more free to give campaign donations as well!!

  8. [...] A Culture of Complacency and Entitlement saying, "After rising from a handful of colonies to the richest and most powerful nation in the world, our country is now declining at an alarming rate under a collapsing economy and a culture of complacency and entitlement." [...]


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