China needs traditional “old lady” spirit
--advocate living within our income
A Chinese old lady and an American old lady are going to heaven. Before them seeing the god, they chat. “It is so great that I can afford to purchase a house at the end of my life after hard working for a lifetime.” the Chinese old lady says happily. “Well, I feel happy for my loan of a house and it’s finally been paid.” the American lady responds. Many years later, similar scene replays except for the reply of the American lady--because of the break out of the subprime crisis, quantities of Americans are on the brink of bankruptcy and can not afford the loan, leaving more or less debt for their children. This is a famous story on the argument of which consumption is more worthwhile to advocate, over consuming or living within our income? People rarely reach an absolute consensus on such a controversial issue.
At present, some people think over consuming is reasonable and necessary; while others claim living within our income is better. Both sides have their merits. Undeniably, Chinese economy has rapidly developed in recent years. As the society advances amazingly, people’s demands have become increasingly diversified and outspread. In the process of modern urban development, we often find ourselves in a financial dilemma. Admittedly, advance consumptions bring many benefits and conveniences to our life. However, along with the positive effects, they have resulted in new social problems, such as financial crisis and credit crisis. After careful consideration of both sides, I am inclined to take sides with the latter. Carefully weighing in mind, we will find that the harm of over consumption in China outweighs its merits. The living way of proportion expenditure to our income is more rationalized and suitable to us as well as our Chinese basic national conditions.
Many people argue that “American people are shrewder because they make full use of their money and enjoy a higher quality life”. They consider that Americans are brave to spend money of the future and enjoy their personal life—which benefits both civil life and country’s economic development, unlike Chinese people live a hard life for several tens of years but only can relax and enjoy life in old age. Therefore they draw a conclusion
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that we should dispel apprehensions and act with courage to spend future money.
At first thought, this opinion seems to be sensible and sound. But on second thought, we will find that it is not often the case.
On the first place, although the pattern of over consumption offers people more short-term benefits and help the increase of GDP, this pattern of consumption is threaten by economic crises, which are especially caused by “bubble economy”. The United States sub-loan crisis is a good illustration of this point. With advance consuming becoming easier and more fashionable, more and more people tend to over measure their paying abilities and consume lots of things that they used not to dare to pay for their expensive. Growing material desires shared people’s eyes under the fashion of over consumption. As too many people were too eager and panic to buy houses, a large number of consuming demands were release in advance. It exacerbated the market supply and demand contradictions as well as the upward pressure on prices in recent years. The increasing of these blindly advance demands, finally, greatly threatened market balance and produce a large pressure on the market supply. Once market demands overrun supplies, economic crises were not far away! Therefore, over-consumption, supply us short-term benefit though, is not a scientific way of economic developing.
On the second place, “General speaking, the developments of economy is hard to predict, resulting in many economic policy mistakes.”It also suits the live of common people fine. The uncertainty of the future life increases the risk of advance consumption, alarming us the infeasibility of over consuming. There are many possible unexpected things in the future like traffic accidents, work changes or disease breaking out. What is more, people always tend to eager for more rather than just what they can afford. Unfortunately, too many people are too young to have learned this principle. So every time when the end of the month is approaching, these poor people find they haven’t have well controlled their desire for purchase and now they are unable to carry such hurry debt. So, as every one can image, tragedy comes into being. Those who can’t afford loans have got to borrow more money from bank and pay for their old debt. As this vicious circle continues, the investment of bank is “increasing”, country’s income is “increasing”, GDP is
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“increasing”, and the quality of civil life is “increasing”, while the risk of economic crisis breaking out and its recession suffering is really increasing! Once the government consumption over the budget, government’s financial affairs will produce deficit. And so with the common people! If the civil financial affair is out of balance, or more precisely, their today’s consumption surpasses future’s income, civil living qualities will become worse rather than better.
On the third place, as the proverb goes, “Put your hand no further than your sleeve will reach.” It also upholds the view of living within our means.Overspread desires for material are also running in the opposite direction of building harmony society for its increasing crime rate effects. The upset of people’s mentality will bring many society problems even cause wars. People will get used to owning more new things instead value the things they have.
On the fourth place, economists point out, “During nearly all these years, the United States has imported more goods and services than it has exported, so net exports have been negative.”In this case we also can see, too much advance consumption will also do harm to the development of country’s economy as well as the living quality improvement of people.
Basing above reasons and the reasons presented below, I prefer the way of living within our incomes.
In moral level, it is no doubt that the spirit of the Chinese old lady is noble. As a senior, she donates herself in helping her later generations’ life, which takes part in constructing Chinese traditional virtue. Moreover, it strengthens the relationship of family and gives a big present for junior to memorize their ancestors. In some sense, it is a way to use the “past” money—the wealth that the senior leaving for the next generation, which only contain love and benefit rather than debt and financial risk! Though the first senior has sacrificed her/his benefit, she/he passes love, safe and happiness to new generations, comparing with the western pattern of passing selfishness, risk and burden to new ones.
At the same time, in the angle of economic development, this pattern of consumption helps the economic development for the following reasons. First, those people who
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advocate the concept of living within our income prefer save their money. So much money can be saved than be consumed in bank and as investments sources. Civil life will be safer and more harmonious. Second, with lots of reliable money source pours in, bank’s bad debt will reduce. At the same time the economic running system will be more stable and the increase rate of economy realer. Finally, reasonable consumption benefits the increase of outlet. Improvement of net exports adds country’s wealth.
On the other sides, living within our income leads people learning how to value our present life and be satisfied with what we have, which in a sense reduces crime rate.
What I advocate is recognize our payment abilities and having living plan of our life, instead of impulse spending and risk underestimate. If we do not pursue the spirit of thrift, there will be no consumption of funds! If we aimlessly spend money freely, it will not to be the way to stimulate consumption, but the waste of social resources!
So from what has been discussed, one can reach only this conclusion: in the upholding high consumption of today, advocate the living way of proportion expenditure to our income is particularly necessary. We should learn from the Chinese old lady instead of the American one. Chinese traditional thrifty spirit cannot be lost.
(words: 1392)
Reference:
① http://www.unc.edu/world/2009Residential/Brews.pdf2009-6-23
Over-consumption/living James X. Sullivan
② http://www.nber.org/papers/w16751
Consumption and Income Poverty over the Business Cycle writers:Bruce D. Meyer,
③ http://www.51windows.net/english/index_P.htm proverb sources ④ 《Economics》p720 the introduction of “Net Exports”
writers:R.Glebb Hubbard &Anthony P.O’ Brien
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