For more than four decades, our shopaholic nation has shown an insatiable desire to spend until our credit cards melt. And throughout this era, consumer spending has well consumed a greater and greater share of our total economy. Only twice since 1965, despite half a dozen recessions, have Americans spent less in a year than the previous one. Indeed, it often seems that we have defined ourselves by our ability to buy supersized everything, from McMansions to expensive jewelry to 60-inch flat-screen televisions—all enabled by decades of cheap credit.
On the surface, it may seem that there's nothing wrong with all that conspicuous consumption, especially for the biggest, most productive economy on the planet. After all, our undying love of stuff has helped fuel a global economic boom. Yet today, America finds itself at a once-or-twice-a-century economic tipping point. A sharp slowdown, record-high gas prices, high consumer debt levels, a plunging real estate market, and the growing green movement all seem to be conspiring to dethrone King Consumer and transform the economy and the American way of life for years to come.
We are like children at a carnival, we have gone from ride to ride, popcorn to hotdogs to cotton candy, without our parents saying no or stop... sooner or later we are going to get sick and learn a valuable lesson.
Unfortunately, in the past times of recession they have passed quickly or been limited to only specific industries and most of us have just spent out way through. Maybe for a month or so we were worried, maybe a few of us lost our jobs, but shortly found a new one, perhaps we lost a bit of our investments or had to dipping into our savings.
But not for very long and then the economy boomed again and all the promises were forgotten, the budgets were tucked away with last year's New Year's resolution. We went off our diets and began to eat everything in sight.
This economic downturn, will not be so quickly forgotten, it has last long enough to imprint long term memory. It has affected all of us in many ways. We have all had sleepless nights.
Living on a budget, watching what we spend, become smart consumers, is becoming a way of life, a habit shall we say, once we move from thought to habit, these new habits just become part of our everyday life.
Spending is like smoking or drugs, there are both a physical and a mental addiction. The physical addiction is easily beat but the mental one it the difficult part. But once we have gone long enough the mental addiction fades away to the past and new habits form. So let's say goodbye to consumerism and hello to savings and budgets and to smart consumers.
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Barry Norman is a contributor to and blogger at firstcredit.net. For over ten years FirstCredit.net has provided consumers free information helping them make sense of credit cards and the financial industry. Whether you are a longtime cardholder or looking for your first credit card, FirstCredit.net can help you make informed decisions.
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