Americans understand the health implications of this pandemic more than the financial ones.

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I’ve spent nearly 30 years counseling Americans on how to spend less and save more. I’ve launched no less than half a dozen businesses that do the same. Yet even if I could convince all 210 million adults in this country to live debt-free, we’d still be deeply in debt – because the federal government can’t (or won’t) live within its means.

When you total all the consumer debt in this country – everything from mortgages to student loans to credit card balances – the total is a staggering $15 trillion. Still, that’s only 60 percent of the federal deficit, which tops $25 trillion and keeps on growing.

The COVID-19 pandemic has exposed some deep flaws and weaknesses in both consumer and federal spending habits. Until we fix both, this country will limp along, never regaining its former glory. Let’s break it down… 

Unemployment benefits

While it’s hard to nail down a specific number, The New York Times has reported, “workers in more than half of states will receive, on average, more in unemployment benefits than their normal salaries.”

Of those, another recent study shows “11.8 percent say they will stay home and collect unemployment, even if they are given an opportunity to return to their jobs.”

While that means nearly 9 in 10 U.S. workers want to earn their living, it still means a lot of Americans prefer to sit around and basically get paid by you – with your tax dollars.

I realize that many young people look favorably upon socialism. A Gallup poll last year claimed, “since 2010, young adults’ overall opinion of capitalism has deteriorated to the point that capitalism and socialism are tied in popularity among this age group.”

However, young Americans also like to travel, wear cool clothes, and dine out. You can’t do that for long when other people are paying you to do nothing. As Margaret Thatcher once said, “The trouble with Socialism is that eventually you run out of other people’s money to pay for it” – and as I say “You can’t benefit from capitalism without contributing to it. You get to take out of it what you put into it.”

Small business loans

The problem with government programs aren’t their intentions. It’s their execution. Democrats and Republicans both propose legislation they genuinely think will help people. Of course, the money doesn’t come from their own pockets, and that matters.

As I’ve written in my second book, Power Up

Learning to live without a credit card is an integral part of financial empowerment. The lessons you discover will add to your building blocks that will eventually lead to your financial independence. Those who don’t use credit cards take money much more seriously than credit card users. The act of physically handing over the dollars to a cashier or waitress generates a feeling of loss. The money is gone.

The same thing goes for government leaders. If the President and Congress had done something similar and spent their own cash on small-business stimulus packages during this pandemic, they might have wondered if they were making a good investment – because I wasn’t the only financial expert expecting problems.

The Wall Street Journal reported that 13 large public companies returned money intended to help smaller businesses under the federal government’s Paycheck Protection Act – but only because they received public pressure and bad PR, not because the government insisted.

While the House recently convened a panel to demand large corporations return the money, the simple fact is that government programs can never anticipate what opportunistic and amoral men and women will do. Human beings have one skill above all others, and that’s finding a loophole in almost anything. It annoys me to no end when governments try to legislate out all loopholes in a flurry of worthless regulations that burden law-abiding business owners, then turn around and hand out money without regulating their own behavior.

To bring it back to a personal finance level, that’s akin to interrogating your children about exactly how they’re spending their allowance, making them fill out forms promising not to buy too much candy, then buying a used car sight unseen without a test drive.

What the government needs 

With the average American household more than $26,000 in debt, there’s no shortage of personal finance experts like me who help those households get debt-free. Sadly, there’s no one coaching the federal government.

The last time the federal government ran a budget surplus was in 2001, which means there will be voters in this fall’s presidential election who weren’t alive the last time our nation’s leaders actually had money in the bank.

Debt eventually catches up with everyone, whether it’s individuals like us or governments like ours. This pandemic has exposed some big holes in our otherwise amazing way of life. We can and will plug those holes, but not if our government doesn’t lead the way.  Stop foolishly spending money we don’t have.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched I’m glad you’re here.

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