Negative Effects of Consumerism Have Changed Society.

Do you know anybody who doesn’t like money?

Americans are always thinking about ways to make more money and spend more money

The more money people make, the more ways they find to waste it.

Shopping is a national pastime and definitely one of the negative effects of consumerism.

We have the need to have the best and most expensive of everything. Americans and buying are nearly synonymous.

It is hard to separate buying from the person. We are buyers, not living breathing persons. It is very strange. 

We live to buy and buy to live. We buy so much, no wonder E-bay has become such a huge business for selling our unwanted and unused junk.

One of the biggest negative effects of consumerism, however, is the lack of savings for the rainy days ahead.

At one time, national crises stimulated saving.

During World War II, the savings rate soared to 25 percent, as the government,

“…partnering with the leaders of civil society, actively stressed the importance of saving for the war effort while also providing a specific new savings tool, in the form of war bonds.”

Too Many Charge Cards

Too much is being put on charge cards and we have become a nation of debtors.

Plasma screen televisions can rank ahead of food, housing, health, heat, etc.

Another negative effects of consumerism are anti-thrift institutions which have made it difficult for middle and lower-income Americans to save with all the aggressive credit-card solicitations, casinos, state lotteries, and payday lenders.

The numbers of anti-thrift institutions outnumber McDonald’s franchises in four out of five of the nation’s most populous states.

The nation’s biggest banks give out money loosely, yet some banks don’t even offer passbook savings accounts.

More powerful still may be the macroeconomic barriers to saving.

The income of a typical family hasn’t risen in real terms since 1999, while the costs of basics such as health care, energy, food, and housing have soared.

“Surveys show that much of the rising credit-card debt is related to job loss, home repair or health care.”

-Tamara Draut, vice president of policy and programs at the New York think tank Demos and author of Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead.

In addition, during asset bubbles and booms, namely the real estate boom, we tend to let buoyant markets do the saving for us.

According to the Federal Reserve, the net worth of households and nonprofit organizations soared from $39.2 trillion at the end of 2002 to $58.7 trillion in the third quarter of 2007, a 50 percent increase. 

The rise in net worth was attributed to the rise in real estate prices and was a mirage as we now know.

Between September 2007 and June 2008, according to the Fed, the nation’s net worth fell by $2.7 trillion. And it has likely fallen much further since.

Those who live by paper gains also die by them.

Need Money for Essentials, not all the Goodies

This all came at a time when real personal savings were tiny: $174.9 billion in 2003 and just $57.4 billion last year. We need money for essentials and less for all the goodies.

With all the negative effects of consumerism also comes the fact that saving can be counterproductive in times of weak demand.

Consumer activity accounts for about 70 percent of economic activity, but where are we spending? 

The great concern about the stimulus package was that Americans would hide away those $300 checks for a rainy day rather than put them into circulation immediately.

China is not Helping

Our global neighbors from China have not helped.

When we buy we need to buy cheap, hence comes our enormous appetites for imported goods from our global neighbors such as China, another one of the negative effects of consumerism. 

If we are going to spend, buy with American companies, where it will fuel jobs for our own citizens.

Is there any reason to think we’ll recover our lost sense of thriftiness in this economic crisis? Perhaps.

The baby boomers, champion consumers who had counted on appreciation of their homes and 401(k)s to ensure a golden retirement, will have to start saving more.

But profligacy and spend thriftiness are also part of our cultural inheritance. In the greatest American novel, The Great Gatsby.

Gatsby, the main character, makes a lot of money and then squanders it in flamboyant fashion. 

For every Warren Buffett, being the tortoise and patiently building a down-to-earth fortune by purchasing stocks with hard-earned money, there’s a Trump, impatiently building glitzy over-the-top towers with other people’s money.

We definitely need to pay attention to negatives of consumerism and get very pro-active!