Consumption In America: All Gain, All Pain

Reminds me of the spoof 5-minute abs commercial. America has been eating and doing 2-minute abs. NYT op-ed on our addiction to consumption and what we might change and learn from it

It’s game over for the American consumer. Inflation-adjusted personal consumption expenditures are on track for rare back-to-back quarterly declines in the second half of 2008 at a 3.5 percent average annual rate. There are only four other instances since 1950 when real consumer demand has fallen for two quarters in a row. This is the first occasion when declines in both quarters will have exceeded 3 percent. The current consumption plunge is without precedent in the modern era.

The good news is that lines should be short for today’s “first shopping day” of the holiday season. The bad news is more daunting: rising unemployment, weakening incomes, falling home values, a declining stock market, record household debt and a horrific credit crunch. But there is a deeper, potentially positive, meaning to all this: Consumers are now abandoning the asset-dependent spending and saving strategies they embraced during the bubbles of the past dozen years and moving back to more prudent income-based lifestyles

Bush's spend and borrow mantra is the only thing that trickled down in his 8 years. The sense of sacrifice we as a country ignored and denied is catching up with us. It's now our time to be fiscally responsible and mean it.

Source: NYT