Fix Economy By Facing Short-Term Pain

by | Sep 20, 2010 | Healthy Money Relationships, The Economy, Weekly Column | 2 comments

If you want to make anyone in the KFG office shudder, just say the magic words “server crash.” We’re still recovering from our recent technology problems.

We had gone along just fine for several years, without worry, assuming each day that everything would be working. Until the day everything crashed.

We had a choice to make: go with the cheapest option that would get things back to where they were, pay just a little bit more to have our server at another location, or take the most expensive route of moving all our software to the Internet. The first choice would be the least disruptive to the firm’s operations as well as the cheapest. Eliminating the server would be the most painful in the short term because it would change all of our software and many of our operations. In the long term, however, it would increase our productivity and efficiency. We chose the middle option.

It turned out to be hugely expensive. Nothing worked quite right after the move, and we eventually had to buy a new server and go through the expense and pain of moving everything again. Ultimately this should fix all of our issues and pay for itself. Arguably, we could have saved ourselves a lot of money and frustration had we done this in the first place. Too bad our crystal ball wasn’t working the day we made the initial decision.

Our server woes are a lot like the current state of the U.S. economy. We were all going along just fine, without a care in the world. If something did go wrong with the economy, we assumed Washington would fix it.

As we all know now, the system wasn’t working perfectly, and it eventually crashed. Then we had to decide how to fix it. We chose the option that was just a little bit more expensive and would be the least painful in the short term—deficit spending. It’s proving to be a very expensive decision that will be incredibly painful in the long term, even though it isn’t causing too much pain right now.

Now we have come to a crossroads. Do we keep on doing what we are doing and keep pushing the pain into the future by deficit spending, or do we take on the pain right now and get our country out of debt? Few Americans really understand how painful it would be to fix our economy sooner rather than later and free ourselves from the worry of a 14-trillion dollar debt. Would that freedom be worth the pain for us?

By not telling us we needed a new server, our technicians were trying to not upset us and to protect us from the short-term pain of having to spend a lot of money. With the clarity of hindsight after the pain of spending even more money, we can see that in the long run they did us no favors.

This is the same reason politicians don’t want to implement a long-term fix to our economy. They’re afraid if they tell us the truth—that fixing our long-term economic problem will cause significant short-term pain (like a depression)—we’ll fire them when they run for re-election.

Developing the courage to take a long-term view of our country’s economic problems requires us to become more educated consumers. We must stop deficit spending in our own personal lives and as a nation and become a country of savers. Above all, we must become willing to listen to those few economists and politicians who are brave enough to tell us the truth, even when it is painful.

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