“My Two Cents”
By Andy Sutton

9/11/2006

As a student of markets and economics, I am sometimes befuddled by the goings on and the great pains that are taken to adhere to the status quo, clinging to it like driftwood in the ocean. As a teacher, I am now encouraged by the awareness of a small group of my students in terms of their understanding about the economic environment, money, and the state of affairs in general.

I had, for a long time underestimated the willingness of today's young people to become a driving force in future events, preferring instead to play video games and watch television. As I've seen this particular group embrace the horror of the reality of today's economic world, I understand now why they choose to embrace it: they don't have a choice. They have to because we didn't. We have had the luxury for generations now of dedicating a growing amount of our scarce time and labor to maintain our relative positions. First we sent two parents to work, then we sent one parent to a part time job. Some families have even had to send both parents to a part time job, the result of which has been children raised on MTV. However, we simply cannot send anyone else out to work without it having a huge effect on our positions. The law of diminishing returns has reared its ugly head and shed light on the root cause of the problem: they just don't make money like they used to.

I have had the pleasure of a captive audience in my advanced business class because these kids want answers. They don't want an apology. They want their parents to understand the forces that have conspired to rip them off over the last half century. We have done them a huge disservice by being dilatory in our approach to money, choosing to borrow and spend rather than taking pause and trying to understand how the game is really played. We haven't fully appreciated the dangers of the 'buy now, pay later' philosophy. Our kids will have to. As a society, we are overspent at every level from the smallest consumer to the largest government agency. To finance this spending we have had to debase our currency, reducing it in value by nearly 95% since the creation of the Federal Reserve System in 1913. This inflation is not only a hidden tax and a loss of hard earned savings but contrary to popular opinion, is not a by-product of a growing economy and is completely unnecessary.

I've used many evil names to describe inflation in my columns these past 5 months. I think you all should hear some of what these kids have to say about inflation, money and debt:

"My dad told me that the Republicans cause prices to go up. That's nonsense because prices have always gone up even when Democrats were in charge."

"I wish people would stop talking about inflation like it was just a natural occurrence. Its just another way the government rips people off."

"If we didn't borrow so much from the Chinese, the dollar might be worth something and maybe we could buy gas for less than 3 dollars per gallon."

"People need to stop keeping up with the Joneses. Otherwise they'll end up with nothing."

"I can't understand why someone would pay 29% interest so they could have a new TV every year. It's just stupid."

"I don't understand why it's ok for the government to print money, but if I do it, they'll lock me up and toss the key."

In case it hasn't become apparent, I am a little saddened and angry. I haven't quite put it into the context that I've needed to up until now. I have always looked at this as 'our' problem meaning this generation when in reality, it is the generations that follow that will bear the cost of our ignorance. However, there is good news. They are up to it. They see the same things we see, and to be honest, they see it more clearly than we do because they view things in a more pristine condition, free of the political and social biases that cloud the judgment of adults.

For the first time in a long time this perennial pessimist is optimistic. As a famous addictions credo goes, the first step to fixing a problem is recognizing that there is one.

Andy Sutton holds an MBA in Economics from Moravian College and is a member of Omicron Delta Epsilon International Honor Society in Economics.

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