Can the world live with a frugal American consumer?

[MRAHoffman]

http://www.businessweek.com/careers/...s+%2B+analysis

I found this to be a VERY interesting article!!!! Thoughts? Comments?

[Buc-O-Mama]

I don't think we're a frugal nation at this point. We are spending less because we have no choice. We are losing jobs, and never ending credit lines have vanished. I'm not sure whether we'll learn lessons at this point or just go back to spending like fools. It almost seems like it takes such a dire financial squeeze to really shape the way we do things permanently. If the economy turned around tomorrow, we might just go back to our consuming ways without much change as a nation. Only time will tell.

Really, as far as the way the world's economy might be affected by our spending habits is just another cog in a wheel. No one seemed to think that we could slip this far economically, so there is no back up plan. We've been growth driven for so long that it had to all explode at some point. That goes for almost every business and for me personally. I wish that I had entertained the thought of our economy turning. I would have planned, saved, and made lots of decisions differently. That's something I have in common with lots of people, as well as businesses. They're feeling it in bigger numbers but it was the same lack of foresight that got us all in the end.

[MomToTwoBoys]

It's not a question of whether it can; it's a question of whether it cannot. The world has built itself a foundation of overextension and living on promises that someone else can fulfill. (This being the credit card companies, mortgage lenders, etc.) What really needs to happen is that people need to rebuild themselves on a foundation of realism, acceptance for what has happened and responsibility.

People need to learn how to work hard again. They need to learn to set their own limits. They need to learn to plan accordingly and have a backup plan. They need to live within their means and utilize what they can realistically afford.

When you have so many countries that have a vast cost of living differential, it's really hard to make a solid financial basis for rebuilding. This means that all of those jobs that people sent overseas to take full advantage of the cheaper labor need to be brought back to the country that it originated from.

Overextending one's self is what got a lot of people into this mess in the first place.

[frugalbabe]

What I think is happening is that we are comparing current sales #'s to what they used to be and it is considered dire news if a store's sales have plummeted and in a way yes the mark of a healthy economy is a busy, active market but when numbers looked so great it was really people buying on fake money, credit with nothing to back it up. Well, now credit is drying up and the market is trying to find it's true baseline. The unfortunate side to this is job loss because it starts a nasty cycle, but as far as people cooling it with their spending and trying to use cash, ultimately that is a good thing.

[Grayce]

The article mentioned that Americans account for almost 1/4 of the world's consumption. That is a huge chunk.

[allenwrench]

We can see we have created a time bomb. Even the highest level brainiac economists can't fix what ails us. Our whole system is based on an unsustainable model that will eventually collapse no matter how much money that is printed up by the Fed. (...they don't even need to print money nowadays, all that needs to be done to create billions is to magnetize a silicon chip!)

Now maybe if our energy supply was stable and affordable and global warming was not an issue, things would be different and we could keep on consuming and expanding as infinitum

Sad thing is...IT'S NOT THAT SIMPLE TO DO A 180...Without compulsive spending and conspicuous consumption funded by unaffordable debt, we would fail as a country.

You ever hear the saying...'I got the tiger by the tail and can't let go?' That is how it has developed in the US of A.

Lets say everyone becomes voluntary simplicity and frugal squirrel devotees. We recycle, reuse, repair and just say no to buying more crap. If we stop buying all the stuff that America imports from China - who keeps the billion plus people in China from starving, so they do not go back to old ways of trying to take over the world?

China and Russia tried to support its people though a sustainable, self sufficient manner when they ere totally RED. Now that they are PINK, they are much more successful at support, So the world exchanged the dread of communist domination for that of the problem of more capitalism and consumption. But as Taoists tell us...fleas come with the dog. America now wishes China and India had stayed backwards. But as long as the crude holds out, they can't go backwards once they got a taste of the American dream.

Maybe if China was a a balanced self sufficient economy with less mouths to feed and things would not be so bad. Same as the US...self sufficient. But everyone is globally connected nowadays.

And on a more local level, if the consumer stops consuming even US goods, the US companies go bust, everyone loses their jobs and his or her retirement funds will collapse.

What about growing a garden...nothing wrong with that? Lets say everyone starts growing 'victory gardens' in the backyard as food has become unaffordable. So some of the few farmers left in the US go bust cause their food just rots on the shelves unsold. Now there is less food being produced and at even a higher cost to those that can afford it the least.

What about more taxes? Tax the little guy so DC can pay for their compulsive spending disease. More taxes = less for us to compulsively spend 'trying' to buy happiness = lower earnings for the greedy corporations = raise hell with the DOW = less cap gains tax income for the gov to squander = everyone's retirement funds sink lower and lower = even less compulsive spending since everyone is poorer..."A debt-based society cannot prosper and is doomed to fail..." ~ Ron Paul

Back in the day, (prairie and turn of the century) citizens were more of a self sufficient nature. Most of us have lost that skill of self sufficiency and we have shifted gears to be dependent on gov and a few other such as farmers or oil producers or China to take care of the whole pop of the US. The problem is, it is very hard to go back without causing a lot of pain. (Actually a lot of deaths)

Hell, the impotent people of modern day and age can't even make pancakes or peanut butter sandwiches and have to buy them ready made in the store...it's really scary.