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Greece vs. Dodge City

May 24, 2010

(photo credits: Reuters, Getty Images, John Kolesidis, Angelos Tzortzinis, Olivier Laban-Mattei)

It is the best of times and the worst of times.

In Greece, thousands have been protesting announced government cuts.  Over the past 10 years, the Greek government has been spending too much on government programs and public sector employment.  The country is now at a point where it owes more than it makes as a country in a year.  If it weren’t for a huge bailout from other European countries, Greece would not have been able to pay back their debt payments.

To accept the help, Greece had to promise to cut public sector employment and cut back on government programs.  Individuals in Greece have not liked this idea as they have been used to the government providing them with employment and aid.  Now, when the bills are due for the past 10 years of overspending, the country can’t come to grips with its current situation.

Historic Dodge City

On the other side of the Atlantic Ocean, in the middle of the United States, Dodge City, Kan., presents a different story.  Thanks to a 1 percent increase in sales tax 13 years ago, Dodge City has seen strong growth, even through the recession.  The extra sales tax went to improving the city’s field sport facilities, the construction of an outdoor motor sports facility, improvement to the civic city, and construction of a special events center.

This extra investment has paid off as the city has seen growth and currently has an unemployment rate below 4 percent.  Even though there are plenty of reasons a town of 30,000 in southwest Kansas could struggle, Dodge City has found a way to prosper.

There are a couple of lessons we can learn from these two situations.  First, we can’t depend on the government or government programs to take care of us.  It is our individual responsibility to provide for ourselves.  Even though there may be a government program in place to help us out now, it can all change within a day.  We have so much power as individuals, it is important that we do not look to others to provide, but to ourselves.

Second, if you spending beyond what you can afford, it is eventually going to come back to haunt you.  For Greece, it will mean more unemployment, lower wages, less services, and slower growth.  For individuals, it can mean possessions being repossessed, homes being foreclosed, and possibly a very difficult retirement.

Third, investing a little now can pay off big in the long run.  If you are not spending more than you make, you are able to invest a little to make for a better future.  Over time little investments can make a big difference.  For Dodge City, a 1 percent investment has fueled the city’s growth.  For someone who is 22, investing $200 a month for 45 years, earning a 10 percent return – the historic return provided by the stock market – will have more than $2,000,000.

We live in a great country where individuals have a choice.  We can choose to spend all that we have and with credit; spend more than we make.  Or, we can also choose to spend less than we earn and invest some for the future.  Whether you are an individual, city, or country, these decisions will help decide whether your future holds the best or the worst.

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2 Comments leave one →
  1. thomasthethinkengine permalink
    May 24, 2010 9:43 pm

    Nice point, succinctly put… I’d much rather be Dodge City than California right now. The globe is riddled with debts, and I’ve just finished an article on my blog about how these can go from dormant to toxic:

    http://thomasthethinkengine.wordpress.com/2010/05/25/baking-the-dough-of-debt-into-the-bread-of-financial-crisis/

    I hope you find it interesting!

    • May 25, 2010 9:51 pm

      Great post! It does seem countries around the world have borrowed to prop up their current situation. In the U.S. I think we have a lot of trouble down the line, not just with public debt, but unfunded pensions and other commitments by the government like social security and medicare.

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