Step Three: Want Less

Is the U.S. in a recession? If you hear someone quoting the informal definition of a recession (as two quarters of consecutive negative GDP growth), then you are talking to either a Republican or a Fox news broadcaster. The determination of a recession is usually left to a committee of economists at the National Bureau of Economic Research (NBER), a private organization of academic economists. The problem is they usually identify a recession months, if not years, after it is over.

Diana Furchtgott-Roth, a writer at the American, says it best, “The old saying goes that economic forecasters were invented to make meteorologists look accurate. When the weather reporter predicts rain, one can look outside to see if the forecast is correct. But when an economist predicts a recession, the only verification is the opinion of other economists.”

Nevertheless, we will be getting our much anticipated tax rebates in the mail soon (if you haven’t already received them). Ever since the $150+ billion package was announced in February, the steady mantra of “spend it, spend it, spend it” grows louder and louder.

America has no problem spending. In fact, the savings rate in America has steadily declined from about 10% in the 1970s and early 1980s to about zero. Frequently, the savings rate actually dips below zero, meaning, people are spending all their after-tax income and dipping into previous savings to support their lifestyles. Over the same period, consumer credit has skyrocketed.

In 1992, when Al Gore was still a Senator, he wrote in his book called Earth in the Balance, that America promises happiness through “the consumption of an endless stream of shiny new products….But the promise is always false.” Pollster Richard Harwood found out over ten years ago that “There is a universal feeling in this nation that we’ve become too materialistic, too greedy, too self absorbed, too selfish, and that we need to bring back into balance the enduring values… family, responsibility, generosity, and friendship.”

In their book Your Money or Your Life, Joe Dominguez and Vicki Robin observe, “scratch the surface of almost any environmental or social justice issue, as well as many psychological ones, and you’ll find a distorted relationship with money and stuff exacerbating if not driving the problem.”

There is a way out of this mess. But, it requires, according to Vicki Robin, “a widespread, deep, rethinking of the material interpretation of the American Dream.”

In short, Step Three: Want Less.

Namaste,

Gattosan