There was an interesting analysis in “The Economist” this week, looking at the US economy’s current woes and the measures being implemented to turn the tide around. However, unlike most pieces about the current global economy which try to predict when the economic situation might improve, this article examines what the long-term consequences might be from this current global recession. If their analysis is correct – which I believe it is – we’ll have to prepare for a dramatic change in our spending habits.
As the article from “The Economist” points out, growth in the US economy for the last few decades has been fueled largely by consumer spending as a result of easier access to credit, thanks in part to companies like General Electric and GM that moved into the money lending business as a quick way to generate revenue. However, as the current economic downturn has demonstrated, this model for economic growth is clearly not a sustainable one. With this comes the realization that the US economy, and by extension the American population, will have to Click here to continue reading »”Is This The End of Mass Consumption?”