We’ve all said it.

“That would be great, but I can’t afford it.”

That house, that fancy car, that new dress, that exotic holiday, that night out …

BUT, in recent decades …

… The presence of credit cards in our wallets has made us much less careful in answering the question: “can I afford it?” But that’s the whole idea. We’ve been pumped along to consume: to buy stuff we don’t really need with money we don’t have. It keeps business in business. It makes banks rich. It keeps the economy moving. It keeps us relaxed and comfortable. It keeps politicians in power.

… And when it comes to bigger commitments like houses and cars, the sales people for banks (directly or indirectly) have always been ready with plenty of money to help satisfy our desire to acquire. It’s what they do: they sell money for profit. And, of course, they disguise the game by calling their salespeople relationship managers, customer service representatives, account managers, advisors … anything but a “salesperson” … and by convincing us they are offering objective “financial advice”.

So we all became less inclined/able to resist and say “… but I can’t afford it” … our modern culture even made it somewhat embarrassing to think/say that … after all, we must try to keep up! And we went into (too much) debt to do just that.

But, I sense that slowly people are starting to push back. Times aren’t what they used to be. Too much debt is too much. The big spending baby boomers are slowing down: they just don’t need to consume like they used to. Younger generations also, facing far more uncertain employment prospects, are, or are being forced to, resist.

This is clearly evident in the retail sector. In the US, big department store chains (Macys, JC Penney) are reporting poor results, closing stores and laying off staff. In Australia, the shopping season was hyped to the max, but the lack of crowing since about how good things are, says it all. David Jones and Myer are in poor shape. (I was surprised at Christmas to see how shabby David Jones in Sydney looked.) Retailers, big and small, are doing it tough.

There’s evidence in the housing sector too. Despite still very low interest rates, the big US banks are reporting much lower new mortgage activity since the uptick in rates a few months ago. In Australia, first home buyers are being squashed out of the market because they can’t afford to participate, despite record low mortgage payments.

Maybe now we are learning again to say … “but I can’t afford it”. And if we are, it’s going to have huge implications for business models, economic growth and financial markets.

And of course, as anyone who has even done a moment of sales job training knows, “but I can’t afford it” is the killer sales objection. If your prospective customer doesn’t have the money, its time to fold and move on to the next prospective customer.

So where are our Governments in this?

Massively in debt because they have suffered the same inability to say no. The same inability to say “… but we can’t afford it”

It’s OK, indeed up to cautious level, sensible, for Government to go into debt to fund long term projects and infrastructure. The debt repayments and interest are then taken from the revenue/benefits that accrue over the life of the infrastructure. We can safely call that good debt.

But Governments everywhere have been bamboozled by vested interests (particularly banks), and the ever present desire to buy votes, to take out the “credit card” and spend on recurrent services beyond the revenue (taxes) they collect. That creates recurring deficits and consequential Government (bad) debt.

Governments have behaved just like us really.

But perhaps now that many in the community are getting the idea that they “can’t afford it”, it’s time for Governments to do the same. They need to start saying to the all the vested interests, to the demanding voters: “good idea … but we can’t afford it”.

Politicians might even get a surprise how well the voters would receive a really well argued and communicated case for more tax or less spending. But are they smart enough, brave enough?

The Tea Party in the US is somewhere on this theme, but they have been making a complete hash of the politics. They are brave enough, but not smart enough. Extremism has rarely attracted a majority, and never delivered long term solutions to anything.

The massively indebted Europeans don’t seem to have a clue how to attack this issue. They don’t seem to be brave or smart. Although French President Hollande might just have attempted a first tiny step this week with a shift to acknowledgment that much current policy in France is unsustainable.

In Australia, Joe Hockey put his toe in this water just before Christmas. Will his political colleagues allow him to go further and act? Smart enough? Brave enough? Who knows?

Who was it said we get the Governments/politicians we deserve?

Sadly, I suspect we will just have to hit at least one more BIG financial and economic crisis before we can genuinely embark on the process of dissolving/dismantling the mountains of debt. The delusion and power of the Wall Street “masters of the universe” and their ilk will not be reversed by anything less.

Bring it on!