ATLANTA -- OUR economy worries me.
For decades, I have been hearing economists say that all would be right with the nation if only we could defeat inflation, balance the federal budget, boost stock prices and push the unemployment rate below 5 percent. So here we are.
We have achieved a level of prosperity that previous generations could not have imagined. Today the typical new home has nearly 2,200 square feet and is packed with appliances and comforts. We now have the highest rate of homeownership in history, and more vehicles than people in this country. We live longer, eat better and buy more than any generation ever.
Yet the richer we get, the more we want and the less satisfied we seem. Our mountains of track shoes, computer games, golf clubs and coffee makers can't quell our urge to spend more.
This shopping compulsion, which some economists are calling "affluenza," is driving us to spend more than we earn. The U.S. household savings rate, which was nearly 6 percent of income as recently as 1993, has officially vanished. The Commerce Department reported that in November, purchases of goods and services exceeded disposable income. Rising incomes allowed the savings rate to nudge up to a pitiful 0.1 percent.
Frantic spending normally happens only after a war or depression, when consumers rush to satisfy pent-up demands for basic goods. But we have been enjoying 94 consecutive months of strong growth and vigorous consumer spending. We should now be moving into a period of heavy saving for rainy days. But we aren't saving nearly as much as we were during the last recession.
This consumer frenzy is making us more and more vulnerable to future economic downturns. When this growth bubble finally bursts, we'll have scant savings to see us through for the short term. Not only are we failing to prepare for a recession, but also we are not saving for our retirement years.
As a nation, we have achieved most of our economic objectives, from running a federal budget surplus to vastly improving our manufacturing productivity. But as individuals, we are failing to reach sensible goals, such as paying off bills, investing for retirement, saving for the next generation's education and spending more time with loved ones.
Unless we can find a cure for our affluenza, we may end up with very full landfills and very empty lives in our older years.
Marilyn Geewax is an Atlanta Constitution columnist.
Pub Date: 12/29/98