Buy ’til you die.

November 12, 2008

I just read a fascinating article by David Leonhart on the International Herald Tribune about the slow down of the American Consumer Culture.  There were two things that stuck out to me.  The first I will quote directly.

from the 1950s through the 1980s — Americans spent about 91 percent of their income, on average, and put away the rest. In the last few years, they have spent close to 99 percent and saved only about 1 percent. This simply cannot continue. For one thing, people need to pay down their debts and replenish their retirement accounts. For another, the psychology of spending and saving may well be changing.

Saving one percent just seems strange, and as tough as the transition may be Leonhart is right, this level of spending is unsustainable.  I have no clue what the solution to the current crisis is, but the prevention to the next seems to be don’t spend more than you have (also known as saving).

But here is the other fascinating thing.  A change of just one percent in American consumer spending represents $400 billion.  This is what makes me kind of ill about the consumer culture of North America (I doubt Canada is too far off from these percentages) I just watched a video at dashhouse about Advent Conspiracy, apparently the cost of giving clean water to everyone on earth is $10 billion dollars.  I’m not one for math, but this represents .025% of one percent of how much the average American spends on themselves.

Check out Advent Conspiracy


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