Michael Lewis concluded his recent Vanity Fair article “California and Bust” with the following:
When people pile up debts they will find difficult and perhaps even impossible to repay, they are saying several things at once. They are obviously saying that they want more than they can immediately afford. They are saying, less obviously, that their present wants are so important that, to satisfy them, it is worth some future difficulty. But in making that bargain they are implying that, when the future difficulty arrives, they’ll figure it out. They don’t always do that. But you can never rule out the possibility that they will. As idiotic as optimism can sometimes seem, it has a weird habit of paying off.
His whole article is a fascinating read about the factors that have led California to its present level of over-indebtedness. The article is also great food for thought about the timeless topic of current vs. future consumption and prudent financial planning on both the government and individual levels. Great articles, such as this one by Michael Lewis, have the power to change behavior by all those open to avoiding the unpleasant realities of an underfunded retirement because they allow the reader to visualize the end-game (see the part of the article on Vellejo, CA).
