There's a new International focus on "cutting back" your monthly expenses to help make ends meet. This concept is severely flawed and economically dangerous!

Remember when you were a kid and you needed money to go the movies, or buy candy, or get a new baseball glove? Odds are you would go to your parents and ask them for it. "Can I have $5 for the movies?" What would your parents say? Did they ever tell you to, "Take a look at your monthly budget and see where you can cut back on expenses?" Of course not! If they were like my parents then they probably said, "You can't have $5, but you can earn $5. Wash the car. Mow the lawn. Clean your room." You would work, get the money, and spend it on whatever you wanted. "Cutting back" was never an option.

Somewhere in our lives we lost sight of this very simple concept. When times get tight we automatically try to "save" more money instead of "make" more money. Instead of "washing a car" or "cleaning a room" for extra cash we cut out the movies and the candy altogether. We reduce our spending. That reduction in spending causes a horrific economic chain-reaction and actually makes things worse for everyone. The movie theaters and studios start making less money because fewer people are coming by. Going to the movies is an extravagance that has been "cut-back" or "cut-out" of your monthly budget. With fewer people going to the movies, the theater doesn't need five people working the concession stand, so two of them get fired. Now, two more people are out of work, out of luck, and "cutting back" on their expenses because times are tight. More people cutting back means even less spending. Less spending means less profit for companies and merchants. Less profit for companies and merchants means more people get fired...and around, and around we go.

By "cutting back" on your monthly expenses you are actually adding to the economic problems we all face. Saving money doesn't help the economy thrive, spending money does. Saving money lulls you into a false sense of security.

You cannot save your way out of a recession. The only sensible answer is to MAKE MORE MONEY!

If everybody made more money then there wouldn't be any more economic problems. If you made more of the "green stuff" you would spend more. If you spend more then people would be hired to create the things you are buying. Companies would also increase profits. Increased profits means stockholders would get bigger dividends and spend those dividends on more stuff. When they buy more stuff more workers are hired...and around and around we go!

So let's all start spending. Let's save the economy! Let's all make more money!