Monday, August 18, 2014

To Over Consume

An economy built on needing people to over-consume. That was what I heard an economic observer say in describing our US economy. It is not the first time I have heard it and the current economic situation is not the only time it has been raised. But the situation since the Great Recession a few years ago has brought it more clearly into focus.

Evidence seems to point to a few pieces of the puzzle why the retail (consumer) economy hasn't picked up as quickly as hoped. One is, the observer said, people are making budgets- and sticking to them. They are also attempting to save more and not using all their discretionary money on, well, discretionary items. As a result the up-tick in car sales earlier in the year has kept money from going into that discretionary spending.

Now, I am not a good example of a frugal, budget-conscious person. I know how to budget but have a very difficult time keeping to it. So I have been as guilty as the next person in lack of savings, etc. But there is much truth in the need for budgeting on individual levels as well as the governmental. It appears that people are working hard at doing that- and therefore the economy isn't growing like it could. Somehow or another that seems like a very unhealthy model on which to base any economy. It is a buy more, spend more mindset. The economy is not satisfied with last year's profit levels- the profits have to be more and more and more.

There has to be a balance here, I believe. I personally am working on that. As I look to retirement and Social Security income I know I will have to be more conscious of what and how I am spending. I wish now I had learned more about how to do that earlier in life. But it is also true that if I had, I might not have been doing my part as a "good" American consumer.

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