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"US says debt outlook worsening" - Lessons from "Poor Richard"

Recent FT Headline: "US says debt outlook worsening."


We are ignoring the lessons of "Poor Richard" rather, more importantly, Benjamin Franklin.  It might be wise for the individuals of the United States to reconsider why we have been successful and what will drive us to failure.

Poor Richard:

The Indies have not made Spain rich, because her outgoes are greater than her incomes.

Buy what thou hast no need of, and ere long thou shalt sell thy necessaries. . .

Many a one, for the sake of finery on the back, have gone with a hungry belly and half-starved their families. Silks and satins, scarlet and velvets, put out the kitchen fire, as Poor Richard says.

"These are not the necessaries of life; they can scarcely be called the conveniences; and yet, only because they look pretty, how many want to have them! By these, and other extravagances, the genteel are reduced to poverty, and forced to borrow of those whom they formerly despised, but who, through industry and frugality, have maintained their standing.

"But what madness must it be to run in debt for these superfluities? We are offered by the terms of this sale, six months' credit; and that, perhaps, has induced some of us to attend it, because we cannot spare the ready money, and hope now to be fine without it. But, ah! think what you do when, I you run in debt, you give to another power over your liberty. If you cannot pay at the time, you will be ashamed to see your creditor; you will be in fear when you speak to him; you will make poor, pitiful, sneaking excuses, and, by degrees, come to lose your veracity, and sink into base, downright lying; for the second vice is lying, the first is running in debt, as Poor Richard says.
  
"What would you think that government, who should issue an edict forbidding you to dress as you should please, on pain of imprisonment or servitude? Would you not say that you were free, have a right to dress as you please, and that such an edict would be a breach of your privileges, and such a government tyrannical? And yet you are about to put yourself under such tyranny, when you run in debt for such dress! Your creditor has authority, at his pleasure, to deprive you of your liberty, by confining you in gaol till you shall be able to pay him. When you have got your bargain, you may, perhaps, think little of payment; but, as Poor Richard says, Creditors have better memories than debtors; creditors are a superstitious sect, great observers of set days and times.

He that goes a borrowing goes a sorrowing.

What maintains one vice would bring up two children. You may think, perhaps, that a little tea, or a little punch now and then, -diet a little more costly, clothes a little finer, and a little' entertainment now and then, can be no great matter; but remember, Many a little makes a mickle. Beware of little expenses; A small leak will sink a great ship.



The leak is an old one.  We would be wise to plug it sooner rather than later.