I read the article, “Economic Fears Drive a Global Sell-Off”, on the front page of yesterday’s (9/23/11) edition of the LA Times. The author reports that investors all over the world are holding on to their money for fear that economies in various parts of the world will falter or even collapse. Towards the end of the piece I read that, despite the worrisome economic trends around the world…

Still many analysts say the U.S. economy hasn’t fallen of a cliff. Whether it will depends on how American consumers react to the latest market turmoil because consumer spending accounts for two-thirds of economic activity… “The key is whether consumers keep spending and don’t make sharp cutbacks as they did in 2008,” said Dean Maki, chief economist at Barclays Capital in New York.

It is sobering to contemplate the statistics on world consumer spending versus statistics on total world spending and see the importance to the U.S. and the entire world economy of U.S. consumer spending. With only five percent of the world’s population, the roughly $10 trillion spent in 2009 on consumer spending represents 71 percent of the U.S. economy and 16 percent of the total spending in the world! Particularly sobering is what percentage of that $10 trillion that could be considered one form or another of unsustainable overconsumption.

I’m concerned about that U.S. overconsumption, what it says about our society, and whether it is healthy or not going forward, for the U.S. to even try to go back to the level of consumer spending we have been at for the past sixty plus years (probably since the end of World War II). Overconsumption in a world where more and more parts of the world are trying to emulate the American materialistic lifestyle is unsustainable and becoming more and more problematic.

I see the Great Recession as an opportunity to get off that train headed towards a world living beyond its means, before our American addiction spreads to the emerging economies throughout the world. But to do so, I think Americans need to do an honest assessment of our economic behaviors and realize that it does us no good to continue to “shop ’til we drop”, “eat ’til we drop” and finance those addictions by working “’til we drop”.

Continue reading →