Americans have been having a terrible time finding the "stop spending" button on the government's keyboard.
The inability is astounding during a high-tech age in which one worker at a computer console can direct an entire factory operation or the flow of electricity through power lines, or raise almost any statistic known to man.But finding the "off" button on spending, even under the stress of an economy on the edge of recession, eludes them. The country seems unable to go on an austerity budget after a decade of spending and borrowing.
The difficulty is more sharply defined each day in government, where taxes rise while the economy weakens; in business, where expenses rise but sales fall; in not-for-profit institutions, where services grow but funds shrink.
Of course, it's an old, old story in the typical American household, which is being urged to spend more than before in spite of what the Conference Board says is the biggest decline in consumer confidence in two decades.
Throughout the economy - among employers, employees, elected officials, investors, bankers, brokers, borrowers - everyone seems to be saying the same thing: stop spending. But few are able to find and click the stop button.
To many people, the most egregious example of the phenomenon was in raising federal taxes while the economy flashed danger signs. Consider some of them:
- The Federal Reserve's monthly report on economic conditions around the country showed each of the 12 districts reported either slower growth or the sharpest monthly drop since 1982. Machine tool orders declined 4.6 percent in September from the month before, putting them 13 percent lower than the year-earlier level.
- The National Association of Purchasing Managers' index of manufacturing activity declined to 43.4 percent in October, the fourth straight month of declines. Anything below 50 percent indicates a shrinkage of activity.
- In the first nine months of 1990, manufacturing failures rose 20 percent, non-manufacturing failures 14 percent, and services 8.5 percent, according to Dun & Bradstreet. Big debt - overspending - played a large role, of course.
- Since January, 600,000 manufacturing jobs have disappeared, and many thousands of jobs have been lost in banking, securities, accounting, management consulting, health care and government. Overspending had a lot to do with it.
- Initial claims of unemployment insurance have soared, and those who remain working are likely to have shorter hours than before. The average work week fell to 34.2 hours in October from 34.7 hours in September.
But federal government spending, in spite of rhetoric to the contrary, continued to rise. Now, taxes are too.
John Sloan, president of the National Federation of Independent Business, comments that "small-business owners feel betrayed by Congress raising their taxes." Main Street, he said, is not a happy place these days.
Why can't the "stop spending" key be found? How can so many people call for the key to be tapped but then find it so difficult to find?
Perhaps it is because minds were programmed during the 1980s, a decade of easy credit, free spending and low saving - and among those programmed, it seems, were the very ones who should have been taught to find the key.