With the mid-term elections coming up and campaign ads constantly invading my mind space. I have been thinking way too much about politics.
I noticed a very common theme in every ad and discussion. It goes something like this, "If we do X, then we solve every problem in the economy." or "If X didn't do Y, then we would be in a much better situation."
Usually pointing to something that needs to either be undone or done in the economy for the better.
It always puzzles me the way a system as complicated as the US economy is always discussed in such a simplistic manner. While discussions on personal finance are viewed as Alien speech. Here's a quick comparison of a US household vs the US economy:
US Economy
The US Economy generates about $27 trillion dollars every year.
The US Economy is a complicated economic machine filled with:
businesses
commodities
debts
investments
government spending
imports
exports, etc.
Average US Household
The average American household makes about $51,000 a year.
The typical American household is very simple:
Most people have a mortgage or pay rent.
We all have utility bills.
A large share of the population has credit card debt,
An auto loan
Student loans
Most of us have one source of income
We spend a ton on leisure, subscription services, restaurants, etc.
Now, this is a generalization. There will always be people on the extremes whose lives are much more complicated.
Yet when I listen to people talk. You would think they were talking about the US economy when they talked about their personal finances.
The economy is boiled down to a simplistic problem where a+b=c.
Think of the number of times people say the government just needs to do this one thing to get the result we want. I am very guilty of this.
Or the number of people who called it "Bidenflation" regardless of the various forces that played a significant role
Versus their personal finance is made to look like the Theory of Relativity.
People will mention all the various nuances and minuscule details of why they can't save
Or why they need an LLC for a non-existent business to save on taxes.
So the question is Why do we do this?
There's a saying "You can't see the forest for the trees."
Our Personal Finances are with us every day.
We literally eat, breathe, and live it, EVERY DAY.
This can make it hard for us to see our left from our right.
On the other hand. The US Economy is so big and has so many moving parts that it is so easy to remove ourselves from it. By doing so, we simplify things and can easily point to the "obvious" problems on the surface without going deeper.
This is why it's much easier for people to talk about politics and the economy. But so hard for people to talk about their own personal finances.
The other reason and I think the bigger reason people hate thinking or talking about their personal finance is simply that it forces us to take RESPONSIBILITY.
When we talk about the economy there are people we can blame. We can say it’s bad governments, bad corporations, bad countries, or even unproductive citizens.
In our finances, there is only us and coming to terms with this is extremely difficult.
To realize, no one can save us from our predicament is hard to accept. Especially when we feel we did everything right but things still don't work out. So we choose to look at all the tiny variables rather than the big picture which inhibits us from actually making changes.
I was going to end this by talking about solutions on how we can deal with this. But honestly, there are no easy solutions. It simply comes down to us acknowledging the reality in front of us. Until that step is taken, we will remain in the same place.
Thanks for reading
Remember, Generosity>greed
🤞🏾