First, Robert J. Samuelson at newsweek.com:
"For the past quarter century, Americans have gone on an unprecedented consumption binge—for cars, TVs, longer vacations and just about anything. The consequences have been profound for both the United States and the rest of the world, and the passage to something different and unknown may not be an improvement."
And the second from a web site called Financial Sense, and an article by financial consultant Peter Schiff:
"As the dollar continues its historic decline, imported goods will become too costly for many Americans. In addition, more of those products still made (or more likely grown) here will be exported to wealthier foreign consumers whose appreciated currencies increase their purchasing power. As a result, fewer products will be available to fill our shelves and those that remain will carry much higher price tags.
"In addition, as defaults on credit and store charge cards continue to increase, the market for such debt will soon disappear. As a result, the credit crunch will spread from subprime mortgages to all forms of consumer credit. Therefore, not only will Americans be staring at higher prices, but they will have to pay in cash."
I hope you'll take time to read both these articles in their entirety.
The time seems to be coming when some of us are going to have to let go of two SUV's in the driveway; plasma TV's in the living room, den and kids' room and many of the other gadgets and status symbols we cherish.
I don't know many people who live that way, although I once did. Most everyone in my circle of friends lives in a small house, drives an old (and paid for) car and keeps their expenses down. I don't work, and neither do many of them. It's not because we're rich, it's because we keep our cost of living low.
I spend too much eating out, but I don't have cable TV, or take clothes to the cleaners (or wear anything that needs to go to the cleaners) or take expensive vacation trips. Even the skyrocketing price of gasoline hasn't affected me much, because I live in an old central city neighborhood where everything is close by and I don't have to drive very much.
These were all decisions I made not because I needed to but because I wanted to. If I was still spending money like I did in 1990, I would have to keep working.
I have made this suggestion before, but I'll make it again: if you haven't read Thoreau's Walden, do so. It will clear a lot of things up.
In case you're wondering, by the way, whether Schiff knows what he's talking about, here he is August, 2006 debating the possibility of an impending recession with Reagan-era economics guru Arthur Laffer.
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