By Beacon Editorial Board
To say that the economy is less-than-fantastic right now is an overly stated understatement. By now, most Americans, UP students included, are aware that the country is in the midst of a recession. Our confidence in the economy, as a nation, is dwindling toward near freezing degrees. Our hope, despite the beacon of light flashed by the promising election of Barack Obama, is fading, too. Unemployment is high and companies are signing bankruptcies. Rumors of nonexistent Social Security in the future are floating around as frequently as banks are asking for bailouts. People are spending less and saving more.
And that's a bad thing, especially at Christmas time.
The worst thing Americans can do right now for the economy is not spend money this holiday season. Over the past few weeks, we've heard news of retail store after retail store reporting massive declines in third quarter numbers. Abercrombie is down; REI is down; even the All-American conglomerate Macy's is down. These companies, which are serious assets to our economy, are on the chain link fence, waiting for the holiday season to see whether they'll fall on the lawn of positive profit or the dead-as-winter sod of further loss.
Oregon, as you probably have figured out by now, is a state that does not have sales tax. We can shop and spend and not pay any taxes. Rather than pull its money from consumption taxes, the state of Oregon earns revenue from income tax. Each month, a certain amount of your hard earned paycheck is snatched from the state so that our fellow Oregonians can have access to many of life's assumed rights - protection, food, and education - without worry.
Unfortunately for Oregon, its unemployment rate is skyrocketing. Over just the past month, the rate of unemployment rose 0.9 percent to 7.3 percent scaling the national unemployment rate of 6.3 percent. The higher the unemployment rate, the fewer paychecks are sent out, meaning the less revenue the state of Oregon can collect. This is a frightening thought.
It's a simple lesson of Keynesian economics: The economy, our beautiful American economy, is driven by aggregate expenditure - in layman's terms - total spending. We find ourselves in financial crisis when total spending falls. At this point, our confidence in the economy drops which motivates a decline in consumer spending. Less consumer spending drives the expectations of firms and businesses to decline. With lower expectations for profits, firms and businesses are likely to make a lower profit. When profits fall, businesses and firms have to cut costs, usually in the form of jobs and wages.
What can college students do about it? As Oregonians - either temporary or permanent - we have a responsibility to spend, spend, spend. The more Oregon retailers make, the less likely they will have to cut costs. Rather than hold onto our cash, storing it underneath our extra-long twin size dorm beds, we need to trust our banks, whether they've held strong or have been bought out, and keep our money in checking and savings accounts. We need to buy our parents, siblings and best friends Christmas presents, just like we do every year. Each dollar that is spent this Christmas season is going to be like a little jolt of caffeine: Each one will keep the economy going, just like each buzzing pull of coffee keeps us going, working through those long midnight hours.
In a utopian society, our spent dollars would make an instant impact. As we all know, the United States of America is nowhere near being a Shangri La. Despite this, our union is set up in such a way, through capitalism and that newly instilled patriotic faith that is running throughout the nation, every person counts and every dollar counts.
