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psnicks
psnicks
Student
College - Freshman

Is"Living beyond their means" best describe the citizens of a country on balance of payment deficit?

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Posted by psnicks on Monday November 24, 2008 at 2:53 AM and tagged with balance of payment, beyond means, business, deficit.

Answers:

  1. jsm0527
    jsm0527 Teacher
    Middle School

    Typically, people who rely heavily on credit cards or other forms of credit are said to be "living beyond their means." In an average week, I expect to receive 3-5 offers for a "pre-approved" credit card. Society is bombarded by offers to "buy now, pay later." Sometimes, the desire to buy more is stronger than the desire to remain debt-free. Some kinds of debt are considered "good" debt (ie a mortgage), while other kinds of debt are not good debt (credit cards). Basic economic principles show that you must have more money coming in than going out. Usually, this is where credit cards become an issue. As a result, interest rates (money you pay someone in addition to the money you borrow) go up, and payments go up. As a whole, our nation is relying heavily on bad forms of debt and are currently in a deficit.

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    Posted by jsm0527 on Monday November 24, 2008 at 9:35 AM

  2. coachshera
    coachshera Teacher
    Vocational

    eNotes Editor

    I agree that traditionally "living beyond one's means" referred to buy now, pay later and basic economic principles.

     However, I would like to expand this question (and response) to the root of the cause of what we typically refer to as "living beyond one's means".

    It really comes from a culture (society) that is conditioned to consume, compete, rather than collaborate, replenish, etc. Fortunately, this "trance" that western society has been under is shifting.  We only hope it's not too late.  I would encourage you to look at this from a broader perspective that just economic principles and approach it from a perspective that includes:

    one's global footprint: (to understand "living beyond one's means" in a much larger context)

    the concept of the Commons

    Paul Hawken 's Ecology of Commerce and Natural Capitalism are excellent resources to begin with.

    Other resources cited below:

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    Posted by coachshera on Monday December 1, 2008 at 8:18 PM