It's Economics, Silly

I really try not to go on my rants about how economics is common sense, for the most part.
But this morning as I was driving into work, I found myself yelling at the radio, "DUH!" when the news came across that the economy contracted in the last quarter.
What'd you expect, George? (Borrowing from the infamous Warner Brothers cartoons).
It just so happens I'm knee-deep in studying the Latin American debt crisis of the early 1980s, and there are startling similarities to what we are experiencing now.
But let me also go on my rant about how we have to belt tighten, we have to implement fiscal and monetary policy discipline, and unless we do so, we are going to be in far more trouble.
People, this starts at home. Let me give you an example. Let's look at it this way. I once was making a good, solid salary at a good communications company. I don't believe in disclosing what I made, and I don't care to know what anyone else makes. It's just one of those "Angie Life Rules" by which I abide, but let's just say that I was used to earning that income for roughly 7 years (with the yearly raise, of course). My point in telling you this is that I had a salary, but guess what? Life changes. I went back to school full time and gave up the salaried career. Not easy, let me be the first to tell you.
Yes, I received an assistantship with a stipend, but let's discuss life in percentages (I LOVE percentages). So I roughly now get in my stipend 25 percent of what I earned in my salary. Trust me, it's not a lot. As a matter of fact, I have to follow such a strict budget that I barely have wiggle room. Thank goodness for declining gas prices.
So what had to happen? Could I continue spending at the levels I was spending when I was making that salary?
Of course not. It may seem common sense, but most people (including our government) do not follow this basic law of finance. If you don't cut spending, you're going to be in trouble especially if you're living on credit. What does living on credit essentially mean? That whoever is living on credit is stripping money from future income, and when we calculate for interest, we're going to be in a world of hurt.
It just so happens that we are a nation of consumers who love credit. We have built a house of plastic cards, and it's not sustainable. As the government scrambles to find ways to save those consumers in mortgage crisis, start watching your own financial house and take care of what you can at home.