I enjoy watching The Biggest Loser, the TV reality show where extremely overweight contestants compete to lose the most weight. As viewers we get to be a kind of fly-on-the-wall observer of the struggles these individuals endure to gain back their lives. And all drama aside, it is true that life expectancy is shorter for those who are at an unhealthy weight level.
As someone who is passionate about financial security, I see significant parallels between problems with weight and problems with debt.
Contestants on The Biggest Loser (TBL) report that their eating habits grew out of control and admit to overindulgence when it comes to food. On becoming a TBL competitor, their trainers show them not only how to exercise, but how to manage a healthy diet. It would be insane to advise these contestants to eat more in order to lose weight and become healthy.
Now suppose the show was about “The Biggest Debtor” whose contestants were extremely in debt (not very exciting to watch on TV, mind you). No doubt, the contestants would be telling stories of overindulgence with spending. The trainers would be financial advisers who would show the contestants how to budget and exercise balance with monthly cash flow. The winner would be the one who gets out of debt and builds the biggest personal savings.
Professional trainers would not tell a person with weight problems to eat more. Nor would professional financial planners tell a person with debt problems to spend more.
Policymakers need to take a lesson from the trainers of The Biggest Loser: The way back to a strong economy is not to encourage spending, but to encourage savings. A healthy economy requires savings or else it cannot be sustained.