patrick.net

It seems that Americans have become permanently addicted to debt –and not just housing debt, either. The savings rate in the U.S. has now fallen to virtually zero, for the first time since they began recording it in 1947. That’s right folks-- zip, nada, bupkis: tinyurl.com/czwm8. The total household debt load for Americans is also at the highest level in recorded history: tinyurl.com/c4s97. For most people alive today, living in debt is neither shameful nor unusual, as it was to generations past. It’s become the new American way of life.

So who’s to blame… the debtors? Whatever happened to concepts like thrift, fiscal responsibility and “living within your means”? Did anyone force you to use your cash-out refi to buy another 50” plasma & trip to Europe? And what about the lenders –are they totally blameless? The very institutions that prop up the economy (Fed, banks, CC companies) not only don’t discourage people from over-consumption, they actively encourage it and seem to do everything possible to increase it.

Is it really fair to label Americans as (mostly) a bunch of over-consuming, hedonistic spoiled brats? Are traditional notions about thrift merely quaint and old-fashioned (pre-MasterCard = pre-historic)? Is perpetually rising debt meaningless in the new global credit-based economy? Is this really a sustainable “New Paradigm” of debt and consumption-driven prosperity and there’s no going back?

Or, are we slowly consuming the collective legacy of generations past, present and future, leaving little but IOUs to pass along to future generations? If so, can the tide ever be turned, with or without a financial calamity on the scale of another Great Depression? Can the ethics of thrift and self-sacrifice ever return to American culture, or are they just obsolete artifacts of a bygone era?

HARM

#housing