And similar thoughts are offered in a recent New York Times article:
NY Times: Shift from Spending to Saving...
From that article:
This happens in nearly every recession, and the effect is usually fleeting. Once the economy recovers, Americans revert to more spending and less saving. Over the last 30 years, the savings rate has fluctuated from over 14 percent in the 1970s to negative 2.7 percent in 2005, meaning Americans were spending more than they made.
This time is expected to be different, because the forces that enabled and even egged on consumers to save less and spend more — easy credit and skyrocketing asset values — could be permanently altered by the financial crisis that spun the economy into recession.
As the kids would say: Orly?
I say: Just give it time, boys. Over the last thirty years or so, the American consumer has repeatedly shown himself to be, on the whole, a mindless spending machine who pays little regard to the usual "What if?" situations in life.
So long as the "bad incidents" like this recession and that of 2000-2001 (neither of which have been all that "bad" by historical standards) roll along only once in a while, then Silly Spending Steve is all good.
Sorry, but I don't buy it. It's gonna take something way bigger than what we've seen so far to bring about a truly "lasting" impact. By "lasting," I mean longer than a few years.
I seem to recall hearing all this same "But we've changed!" schlock right after September 11, 2001, too. And look how long that lasted. A handful of years, tops.
Remember? Within four or five years a large segment of us were right back at it, buying McMansions with upper-six-digit price tags and parlaying the newfound "instant equity" into HELOCs (Hi, Corazzis!) and plasma TVs and weekend RVs and Caribbean vacations.
Thanks to an extravaganza of gubmint stimulus and debt-market manipulations, I have little doubt that we'll be back in our customary role as cheap-debt junkies soon enough. The only thing that'll change my view is that if the economic situation worsens from here — as in, the bottom falls out at some point.
We know that the Great Depression changed people FOR LIFE.
Nothing I've seen in the last year or so would lead me to believe that we've achieved such an outcome this time.
But Just Maybe...
Could a larger meltdown occur going forward? Sure. I wouldn't rule anything out. Actually, the fact that so many people (like Dave Ramsey) insist that another Great-Depression-like event "can't happen" because of all the economic "safety valves" we've put in place ... well, that sort of talk circulated about the "unsinkable" Titanic, too.
Too bad nobody told the iceberg.
History does have a way of crushing hubris under its boot.
Whether the uber-consumer mentality will be a victim of this recession remains to be seen. As of today, if this is all the pain we get, I really doubt it.
Thirty years of "Debt is your friend!" spending won't go away so easy.
We haven't seen "bad enough" yet.