Early Retirement

5 Reasons I Suck For The Economy

Have you been reading the news recently?  We are apparently in some very serious economic times.  Talking heads, politicians, and big-important economists are kind of saying that this could be the end of western society as we know it while others are saying things are bad but those people who say this is the end of western society as we know it are crazy – or at the very least very uninformed.

There is also this notion floating around that people should really spend more money to help keep us all from falling into the terrible, gawd awful abyss of not buying cappuccinos, not going out to the movies, not buying the latest doodad or gadget, and not buying new cars.

Some countries (Finland) are even using a public ad campaign to encourage spending.

To be honest, this talk does make a lot of sense to a certain way of thinking.  If an economy relies heavily on  consumer spending then it is the worst thing in the known universe for individual consumers to stop spending.  It would be like all the oil wells of the earth suddenly drying up.

But here is the kicker – I won’t be spending more to get us out of this mess.  Not one penny.  In fact, I think that I suck for the economy.  Why do I suck?  Here are my top five reasons:

Reason #5 – I don’t buy things I don’t need.

Consumer economies depend upon people buying crap that they don’t need to make their lives better, happier, more fulfilling, more comfortable, etc.  The underlying assumption here is that crap you don’t need makes your life better, happier, more fulfilling, more comfortable, etc.  I beg to differ.  That is why I don’t do it.

This means that I don’t create jobs in Starbucks because I don’t buy coffee.  I don’t create jobs in the auto industry because I don’t buy their cars.  I don’t keep McDonald’s in the black because I don’t eat fast food.  This is bad for the economy because I don’t create any demand.  Companies produce and produce expecting to meet the demand of the buying public.  I don’t buy so I don’t create demand.

This means that companies don’t make profits because they can’t sell to people like me.  Because they don’t make profits they have to fire employees who in turn can no longer keep up with their lifestyle of buying crap they don’t need.  This creates even less demand which hurts company profits even more which makes them lay off more workers.  It is a vicious cycle if you ask an economist.  I suck for the economy.

Reason #4 – I horde cash like Scrooge McDuck.

Sweet, sweet swimming holes of gold.  Three little nephews with a broke ass father.  Time machines and adventures galore.  Who wouldn’t want to be Scrooge McDuck?  Not very many people if you ask me.

That is why I have taken it upon myself to save as much as I possibly can.  My short term motivation: get through graduate school without incurring any debt and still feed my wife and son.  That means aggressive saving now so that I can eat later.

It also means that all my liquid assets don’t provide the economy with much liquid to grease its dirty clogs.  I don’t take risks.  I don’t invest in new entrepreneurial endeavors.  I don’t fund commercial or government projects.  I horde my cash like a good Scrooge.

What happens when there isn’t capital for these things?  Business stop expanding and governments are not able to hire as many people.  This creates less demand for needless goods and services and causes the economy to tank.  I suck for the economy.

Reason #3 – I think the concept of ‘money’ is really weird.

Have you ever had a nice little sit down with yourself and pondered money?  It is really weird when you begin to think about it.  We have all come to rely upon it to get the things that we need to live: food, water, shelter, clothing.  We exchange our labor for the money we use to get these necessities.  We sit in offices all day long and type on computers, producing words, or images, or codes, or God knows what else and someone else gives us money to do it.

Where did this money come from?  Someone magically created it.  Why does it have value between you and I?  Someone magically said that this was how it should be used.  Sure, the principles behind money have a long tradition dating back thousands of years and it is a useful bit of technology, but its only as valuable as the person your trading it to believes it to be.

I personally think that it is kind of scary that our economy is built on magical paper (especially when that magical paper is so removed from the production of things that are truly valuable).  As a result I don’t do the things with my money that would be good for the economy because I just don’t get it. My not getting money sucks for the economy.

Reason #2 – I don’t produce anything truly valuable.

That doesn’t mean that I don’t work.  It just means that what I do at my job is really pointless.  It does meet a perceived need – the need of my employer.  They need me to do x because they have a customer who likes having access to what x gives them.  But when we all sit down and think about it, x is really just a trite convenience that someone could do themselves if they wanted to.

My job has subjective value, but not objective value.  It isn’t valuable in and of itself.  I don’t save lives.  I don’t make something that improves the condition of humanity at large.  I don’t advance human knowledge.  So in absolute terms I would have to say I suck for the economy.

Reason #1 – I want to retire early.

I would quit my job and live off of $6,000 a year if I had the accumulated capital to do so.  Like right now.  That means I would be leaving close to a 100 perfectly good years on the table (if I live to 125 as I expect!).  I wouldn’t stop adding objective value to the world, but I sure wouldn’t be good for a consumer economy.

If I can achieve the goal of early retirement I will accomplish two things that suck for the economy:

  1. I would effectively relegate myself to a lifetime of under consumption
  2. I would keep all my demand (capital) pent up until I absolutely had to use it to buy necessities

I wouldn’t spend money on lattes and designer jeans.  I wouldn’t buy books when I could check them out of the library for free.  I wouldn’t buy new cars when a bicycle or used car will do just fine.  I would be so removed from a consumer culture of buying stuff for stuff’s sake that I would be an almost imperceptible spec on the economy’s radar.

And because I don’t buy things the whole cycle of businesses not making profits and firing employees who now can’t add to the collective demand is going to perpetuate itself for as long as I am alive.

I suck for the economy, do you?