"Decadence...degeneracy...debt...frauds...numbskulls," our friend Michel was probably speaking for thousands of dear, long-suffering Daily Reckoning readers.

"Don't you ever have anything positive or upbeat to say?" asked Michel. He is a French intellectual, but that doesn't mean he can't tie his
shoelaces. He still has a useful thought from time to time.  

So, yes, dear reader, we do. We note that even a man who is half-dead is half-alive, and the grass grows greenest around the manure pile. Yes, Western civilization is in decline.  But no, it doesn't mean we can't have a good time. 

Do you remember our dictum:  "Americans spend money they don't have on things they don't need and would probably be better off without?" We had in mind electronic gadgets, particularly big-screen TVs, and fancy automobiles. But colleague Lila Rajiva reminds us that it is not the gadgets that do the financial damage, it is the big-ticket items - expenses that are supposed to be beyond consumers' control: housing, health care, education, transportation, energy and taxes.

"Home ownership getting tough for the working class," signals a CNN/Money headline. "Atlanta gas prices + 40 cents in a month," adds the local paper. "One quarter of Boston's homeowners stretched," says the Christian Science Monitor. Well, here is today's cheerful news:  even the big-ticket items can be greatly reduced - with no real loss in human happiness.

Meanwhile, the papers are all a-twitter with comments on Ben Bernanke's speech to the Economics Club in New York. The new Fed chairman seems to have picked up his predecessor's speaking skills; when he stopped talking the essential questions remained unanswered. Will he raise the benchmark rate? Or will he not?

The stakes are high. America is a country that lives on debt; we pay $3 billion in interest charges every day. Most families have no cushion of savings - nor do they have a "labor cushion." The typical woman works as well as her husband. When times get tough, she cannot go "back" to work; she's already working full time. So, when interest rates rise, something will have to go.

So, all eyes are on the Bank of Ben Bernanke. Our guess is that Bernanke believes what he says: that the economy is solid, and that only an old coot like Warren Buffett would have serious reservations about it. He also said he was not worried about an inverted yield curve. That too, he said, is an old-fashioned indicator not worth thinking about.  Our guess is that he will confidently raise rates another quarter point and then, when he sees the economy crumbling, cut like mad.

Goldman Sachs estimates the amount taken out in home refinancings last year was $834 billion. Of that, 68% was used for discretionary spending - amounting to about $1 trillion over the last two years. Even with all this spending, according to economist Walter J. Williams, the economy shrank. What will happen when interest rates go up and the "refis" stop? You know what we think, dear reader, but we will tell you anyway. We think today's low rates are based on a delusion. We think that history has come to a dead stop, that nothing bad will happen, and therefore, you don't need any protection from it - either in the form of savings, or in the form of higher, just-in-case yields. 

"The end of history...the beginning of nonsense," said Maggie Thatcher, taking the words out of our mouths.

Back to Bill Bonner, and more good news...

*** Hmmmn. Robert Shiller, he of "Irrational Exuberance" fame, is backing a way to trade options on the housing market.

*** Yes, dear reader, you can save money - big money. You can live better, even as the U.S. Empire declines. The Exodus of power and money continues; the Experimental dollar collapses. The Economy turns down and the cost of Energy turns up.

Who really is better off for giving up a third of his income to taxes?

Anyone who reads the paper knows the money is wasted. The taxpayer might just as well waste it himself, but taxes are a special case. The world improvers and bullyboys will send you to the slammer if you don't pony up your share. For every other big-ticket item, though, you can evade the cost without ending up in the company of stick-up men and drug dealers.

Take education, for example. One of our children has already graduated from college.  Three are still in college. We have two more who will probably go to college in the next few years. Despite our familiarity with them, we are still shocked every time we get a tuition bill. One college just announced a hefty increase for next year. Another merely raises the rates without notice. 

We wondered how other parents managed.

"Dad," Jules explained to the chump he calls his father, "All the other kids have some form of scholarship or financial aid. Even if their families have a lot of money, they seem to all get something. We're the only ones paying the full rate."

Even with the loans and hustles, college is a crushing expense for many families. And what do they get for it? Unless the kid is in the sciences, applied or abstract, the answer is probably nothing. We looked around us. Of all the people we know, who would have been worse off if he had not gone to college? What did any of these people learn that was actually useful or uplifting? We can't think of a single person...or a single thing. What was learned that wouldn't have been learned better on the job? Or from reading books?  Or from keeping your eyes open?

We don't know. In our own career, we can't think of anything we learned in school, after the 6th grade, that we couldn't have learned on our own. Besides, most of it subsequently proved to be incorrect, misleading or irrelevant. Remember the line from the popular song: "When I think of all the things I learned in high school, it's a wonder I can even think at all." We cringe when we think of all our classes in government, economics, politics, sociology and history; it was as if they were all taught by Thomas L. Friedman, giving us an idealized, child's notion of how things work. Even then, we thought there was something fishy about them, but imagine if we had stopped thinking at age 18. We'd be buying the Dow at 11,000...and voting for Hilary Clinton! 

By our estimate, at least half of the spending on what is called "education" could be tossed out the window with no loss in real knowledge or brainpower.

And what about housing? People pay a lot more for housing than they used to, largely because they buy a lot more house. But, who was ever really made happier by a bigger house? Average house sizes have doubled since the 1950s. Almost everyone now has a formal dining room he doesn't use, and lonely extra bedrooms for non-existent guests. 

We are not ones to cast stones, for we have our own enormous pile of glass in France.  Most of our rooms are seldom used. In fact, there are bedrooms that haven't been entered for years. For all we know, the desiccated body of the last weekend guest is still there, lying in bed and waiting for a wake-up call. The main living room is used as a passageway; it might as well not be there. The family is afraid to go up in the attic; we hear strange sounds at night. We wonder what is going on up there. A tribe of gypsies could live up there; we would never know. All we get from this space is the expense of heating it to keep the pipes from bursting, and keeping it up.

Do you really need to spend a lot of money on a house? Far away and long, long ago - long enough for the statue of limitations to have run out - we decided to build an experimental house with our own two hands. We were young, strong, and sure we had a better idea than any that had come along in thousands of years of vernacular architecture.  

The state of West Virginia was less sure; neither its building codes nor its zoning regulations would permit it. So, we sited the place in the woods where no one would see it, and we built it anyway. We tied rebar and wire mesh together to make a cage. Then we sprayed it with gunite, and covered the inside with plaster. Dirt was heaped up around, so that the place almost disappeared completely, but leaving open a large section facing the south. This was covered with glass, sloping down to the ground. The total cost: less than $20,000. 

"Interesting..." was Elizabeth's judgment on the greatest achievement of her husband's life. But she didn't want to live there. It did not accord with her idea of what a house should be, though your author was perfectly delighted with it. It was like no house he had ever seen. One great feature was that it needed almost no heat since the glass wall acted as a heat absorber, which was protected in summer by leafy, overhanging tree limbs. 

Maria noticed the drawbacks: "Eeewww...there are bugs in it." And so, after a brief spell, the family abandoned the experiment and returned to more conventional quarters.  The house is still there; it needs no maintenance, no heat and no attention. The last we heard it had been rented to a man who has been happy there for many years.

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.