I wonder if the increased consumption is due to two subconscious thought patterns
* people realizing in their gut that there is no return on savings/investment in the current climate, so why save when that new item can be used/consumed right now.
* people realize that the economy is bad and unemployment is high.. but there is denial it could happen to them… they feel that their jobs are secure/immune…[/quote]
Well I think number 2 is very likely and number one might even fit into some sort of compulsion category.
I would also say, that much of the middle class, is not middle class, they are poor and it is masked with debt or living beyond their means – enabled by easy money. Though, this segment probably constitutes very little to the overall economy in overall dollar value, but a big number of people. We just may also have a another big segment of people pushing it a little further than they should, which constitutes a good deal more to the economy. We also have a small percentage(25%?) living within their means and a small amount of them living very extravagant lifestyles that are worshipped with these “life-style images” showered, from every form of media source possible, over people 24/7. Constant imagery of the “good life” from birth to death must have some effect on people – if you are poor you have no dignity or respect and you are what you own, is our value system. As well as presidents telling people to GO SHOPPING. Why, I just don’t understand what is wrong with these people trying to “live beyond their means” there must be something wrong with them – these people need to be punished!
Coupled with the systemic wrecking ball the Elizabeth Warren describes makes it an even more precarious situation.
But, to the idea of; if these people would “live within their means” and accept the fact that they are not “what ever consumption level” our economy would be better off, is not even a valid line of thought – if they did not open up the spigots of easy credit decades ago – we would not have the economy we have today – it would have ran into problems years ago – or the reality of our economy would have been exposed years ago and that is something nobody wants to face. Quite possibly, some of those living the good life, “within their means”, would not be where they are without those living above their means.
Interestingly, a sudden rash of people being frugal and living within their means actually, in the short-term, is detrimental to social functionality because it increases unemployment, decreases tax receipts, etc… We all know wall street would boo and hiss consumer spending going down. Kind puts a new meaning on what it is to be responsible, eh?
