Spend, Spend, Spend. It’s the American Way (Americans spend while the world saves)

New York Times ^ | 01/16/2012 | Robert J. Schiller

[SeekAndFind]

GRIDLOCK in Congress implies that there won’t be any collective decision to spend more as a nation to get out of our slump. Increases in deficit spending seem unlikely, and so does the balanced-budget stimulus I’ve been advocating in this column. For now, we must pin our hopes for a robust recovery on the willingness of millions of consumers to spend substantially more.

But what really drives consumer spending? Economists are reasonably good at divining how consumers tend to react to changes in government policy, but in the absence of such policy, and when the economy is in the doldrums, they aren’t very good at predicting spending shifts.

A new book, “Beyond Our Means: Why America Spends While the World Saves” (Princeton University Press), offers some insights. It was written by Sheldon Garon, a Princeton professor who is not an economist but rather a historian with a sociological bent.

Professor Garon says that our willingness to spend is driven most prominently by our reaction to major events in our collective memory, including wars and depressions, and that it also depends on national character, which differs across countries and through time. Spending, of course, is shaped by deliberate government policies. Notably, during wartime, governments all over the world often start huge public-information campaigns to promote saving.

The United States, however, is something of an exception. More than any other country, it elevates consumer spending to a virtue, sometimes minimizing saving. There is even an idea here that it is patriotic to spend, rather than to save.

For example, in a speech two weeks after the 9/11 terrorist attacks, President George W. Bush urged Americans not to be cowed: “Get down to Disney World in Florida,” he declared. “Take your families and enjoy life, the way we want it to be enjoyed.”

[WOBBLY BOB]

Obama asks Congress for $1.2 trillion increase in nation’s borrowing limit
http://www.washingtonpost.com/blogs/44/post/after-delay-obama-asks-congress-for-debt-limit-hike/2012/01/12/gIQAA3ADuP_blog.html
 
 Geithner rejects GOP warnings of Greek-like debt crisis in U.S. 
 
 http://thehill.com/blogs/blog-briefing-room/news/98599-geithner-us-not-at-risk-of-debt-crisis-like-greece
 
it’ll never happen here....riiiight.

[vette6387]

“A new book, “Beyond Our Means: Why America Spends While the World Saves” (Princeton University Press), offers some insights. It was written by Sheldon Garon, a Princeton professor who is not an economist but rather a historian with a sociological bent.”

“Princeton University professor.” Kinda tells all we need to know about the book doesn’t it! The guys not an economist, but rather a “historian with a sociological bent” Wonderful! “I am here to tell you about something about which I know nothing.” Still have an excellent vintage red wine in the cooler waiting for the day the NY Slimes goes under!

[gorush]

Here is a book that y’all may enjoy as much as I did:

Your Money or Your Life: Transforming Your Relationship With Money and Achieving Financial Independence by Joe Dominguez and Vicki Robin (1999, Paperback, New): Transforming Your Relationship With Money and Achieving Financial Independence
Joe Dominguez, Vicki Robin

[boomop1]

Easy credit is one of the things that destroyed America.