Costco: a Model for the Economy?

For months the U.S. Congress has been sparring among itself over whether or not to raise the national debt limit.  Since both houses of Congress are no longer controlled by a single political party, the debate has raged on with no end in sight.  Unable to stand at a distance from the problem, President Obama has been reluctantly pulled into the fray.

Costco, at The Promenade, Bridgewater, NJ (Bergeron Image)

The issue is how to contain the seemingly irreversible spiral of national debt – currently in the trillions – that burdens our nation and threatens to stall the economy.

It’s not as if one could not have seen this problem building up.  The national government has been spending beyond its means for years.

Why not?  All that politicians needed to do was to keep borrowing printed money to cover their spending habits.  A war here, a war there and the economic costs begin to add up.  Afghanistan.  Iraq.  Libya.  Add to the mix all of the unfunded domestic programs and . . . . Well, I won’t keep annoying you with facts.

Which brings us to Costco.  I like its business model.  It’s not the place to go if you want to keep a tab running like the Feds do.  At the checkout, you are expected to put cash on the barrelhead (debit card’s the same thing), or you may use Costco’s own American Express vanity card. 

 That’s it.  And that’s the way it should be.  No VISA, no MasterCard – please! None of those other cards either.  Would you just pay up front?  Thank you.  Please come back again.

I like that.  Reminds me of a more substantial time.  As when, for example, if a person wanted to buy a house, he or she actually had to have a salary, and the banker actually had to make sure that a person could afford that home.   Because Mr. Banker (they were mostly guys then) could not get off the hook by selling off a bad loan to a financial aggregator who would magically turn that loan into paper and sell it off to a sucker down the line.

Remember when plastic was used only for what it was intended to be?  It was a marvelous invention by which this new material could be molded into all manner of practical and usable items. 

But that was before smart financiers thought of fashioning it into a little square card that you carried wherever you went, so that you could then get yourself way over your head in hock with no hope of ever paying back your debt at usurious interest rates.

I’m not trying to irritate anyone with this little post.  Just reflecting on the national spending binge that we’ve been on which has gotten us as individuals and – as is obvious by the political posturing in Washington – into a deep tub of hot water on the national level as well.

Costco, anyone?

Thanks for reading.  Keep yourselves cool.

p.s. Dear D.  Enjoyed your company;  I’ve had this in mind long before today!