Sometimes it feels like my husband and I carry the brunt of stimulating the economy.
Earlier this year plumbing and other problems forced us to undertake major repairs to our home. Fitting that the plumbing would mostly drain our rainy day fund. Then we decided we could no longer put off replacing our furniture, whose advanced age showed in the stuffing and springs poking through the couch cushions. Nor could we stand the sight of our way-off-white carpet, a foolish, pre-children purchase. Outside, we planted trees and shrubs.
Investments in our home, big and small, made in the face of the endless, ubiquitous, all-purpose excuse not to spend money: economic uncertainty.
I work at a newspaper. Believe me, we know all about economic uncertainty.
Perhaps it was foolish to diminish our tiny stash of savings. All kinds of things might happen over the next few months to make me wish I still had my hard-earned American dollars and a leaking bathtub. It will have to be something pretty terrible, though. And it will certainly have to be something stronger than "uncertainty." Especially when the consequences of NOT spending the money loom larger: water damage behind the walls, tetanus from a couch-spring gouging. Nobody wants that.
Uncertainty defines life. No one knows for sure what will happen tomorrow or six months from now or a year from now. We had no signs from on high that spending the money would turn out OK down the road. We continue to save for rainy day costs and for our children's education, but we spend to make our lives better now, too.
Managing our modest household budget through tough times requires considerably less high-stakes maneuvering than guiding a multi-billion-dollar corporation through a recession, obviously. But some parallels hold true, including knowing when tightfistedness does more harm than good.
American companies are sitting on cash stockpiles in the billions of dollars, delaying investments in their future and their workers. Cash assets have reached record levels: $1.6 trillion in savings, according to the Federal Reserve, even during a time when low interest rates mean that money is as good as buried in my back yard. The reason for the hoarding? "Economic uncertainty."
It's an excuse as lame as "the dog ate my homework." I picture CEOs filling their bookshelves and boardrooms with mountains of bundled hundred-dollar bills as they peer out plate glass windows, fretting that a partially cloudy sky could mean rain. Meanwhile, their workers suffer with leaking bathtubs, underwater on their mortgages, unable to pay for their kids' educations.
What will it take to get those companies to invest the cash? No one wants them to buy ice cream and bubble gum when folks are starving. But a strong company that spends money to invest in itself and to support its workforce hardly seems wasteful, even in the worst of financial times. Especially when spending money now is probably the goose the economy needs.
Heaven knows the Washingtons did their part. Let me assure you we did not have mountains of bundled hundred-dollar bills with which to do so. We did have enough to repair leaking pipes. We have non-water-damaged walls to show for it, as well as a living room that is much, much more pleasant and comfortable to be in.
Spending that money meant that we contributed to the household budgets of the plumber, and the handyman who fixed the drywall, and the cabinetmaker and stoneworkers who rebuilt the vanity, and the retailers who provided our shower curtain and fresh paint, and the furniture makers who created the couch we use every day. If the little we had to spend contributed to the lives of so many, what could the billions stagnating in corporate accounts do?
Yes, set aside cash for emergencies and to build a cushion against that perennial scourge of economic uncertainty. But when sitting on the cash is itself creating the uncertainty, it's time to spend.
Michelle Washington is an editorial writer for The Virginian-Pilot. Email: firstname.lastname@example.org.