One December Day in 1956 I was poking around down in the basement of our family home in Casper, Wyoming. Inside a makeshift closet under the basement stairs I found a Daisy BB gun, exactly like the one that Santa was going to bring me for Christmas. Later that evening, after a discussion with my parents, I found out the truth about Santa Claus.
In a sense, when we find out there is no Santa Claus, our innocence is lost. An economic reality also asserts itself; namely that there isn’t some jolly old elf that makes toys for free and delivers them to kids all over the earth. Alas, it takes parents and their hard earned money to buy toys. Scarcity asserts itself; human wants exceed resources. There is no free lunch.
It appears that not all adults have learned the Santa Claus lesson. They want to believe that someone, somehow, will spare them from economic reality. Let me illustrate a few cases.
1) A man on a radio ad says that if you have more than $10,000 of credit card debt, his firm will call the credit card companies and get them to forgive most of your obligations. Of course, you will have to pay him an “up front” fee so he can get started.
2) A fellow on television says that he will get the IRS off of your back. He’s a tough guy with former IRS examiners on his staff. He knows the secrets of getting the IRS to reduce your back tax obligations by as much as 90%. Furthermore, he’s not afraid of the IRS. Of course, there is an “up front” fee to get started.
3) For folks who have difficulty making their mortgage payments, they can make a phone call and the special folks on the end of the line will negotiate with their lender and get them a “mortgage adjustment” which will drastically reduce their loan payments. There is an “up front” fee, of course.
Those who are preyed upon by the hucksters above have put themselves into a bad financial condition. Desperate, they grasp at straws in the hope that “Santa Claus” will help. Most of the time, the “cure” is worse than the disease, putting these folks in an even worse financial condition. Eventually, reality asserts itself, causing much hardship and pain.
Lest we think we are better than foolish folks who are preyed upon by con artists, we might remember that “collectively” when we go to the polls we also believe in Santa Claus. We routinely ask our congressmen or senators to balance the budget or cut government spending, except for the program or tax break that benefits us. What’s a poor politician to do? Ironically, voters who act responsibly in their personal financial lives, go to the polls hoping that politicians are like Santa Claus.
We live in an era where individually and collectively we enjoy behaving irresponsibly but we don’t want to accept the personal or national consequences of our actions. This Christmas it is time to wake up and smell the coffee. Bankruptcy, either personal or national, awaits us if we continue to spend money we don’t have. Alas, there is no free lunch. The new box with Santa’s BB gun inside is hidden in the closet under the stairs. On the box is a price tag from the Gimbles store!