Damned if I do / don't

This Sunday's NY Times Business Section had a brilliant assessment of the decline and fall of our economy and how our overspending habits are both the cause and the cure of our depression woes. Basically, the present economic meltdown (where it can't be blamed on Wall St. or mis-mortgaging) can be linked to our love affair with malls - and how 70% of our spending is on personal consumption. The article goes on to describe it as a toxic relationship, in which we need to quit our overspending to be more financially healthy as individuals but right now quitting overspending is making our economy generally ill. It's wonderfully written - you barely notice you're in the business section - and a very concise description of the consumer connundrum. Here's the inelegant but effectual Permalink:


http://www.nytimes.com/2009/02/01/business/01mall.html?partner=permalink&exprod=permalink

In case all the cathartic self-disclosure hasn't tipped you off yet, I'll admit I do have SOME guilt issues, especially as relating to all things monetary. As my husband reminded me this week, that famous FDR quote "The only thing we have to fear is fear itself." was addressing consumer jitters during the Depression Era. (Disclaimer: I haven't bothered to fact-check that, and Bob is a repository of all sorts of trivia. He also has a great ability to bullshit, just because he's smart and says thing in his authoritative way. ) So - voluntary simplicity may be helping my own family's bottom line but cutting back on spending is adding fuel to the fires of economic meltdown. It's all about confidence - and since there are no guarantees about jobs right now, spending less and saving more is the smart move, right? But less spending means the economy is stalled longer - demand is down, jobs are cut. It's a vicious cycle.

Originally when I started this year with the hopes that by limiting my buying to used things, I'd hoped to achieve a smaller footprint in terms of stuff: packaging and raw materials. And becoming more mindful of reasons for shopping and the urge to accumulate would be an added bonus. But with my raised consciousness I've also cut back on buying in general. I still spend money on experiences - entertainment, dining out, etc. but it seems I'm not spending quite as much. Case in point: I've only had $6 cash in my wallet for the last week and it was only today I spent $4 on coffee and a danish (plus tip). Of course there are the recurring charges for my life's necessities - mortgage, school fees, utilities, insurance - but those are fixed costs on automatic bill-pay so it seems less painful. It's my discretionary spending that is way down. I'm not sure that this translates into actually saving money, as grocery bills alone are noticeably higher each week. (case in point: Hershey's miniatures, 2 bags for $9. An advertised special? That's not even decent chocolate! It's what you grab when nothing else is available, and even if it's old enough to go all white and chalky it doesn't taste any worse.)

So I feel it's a good choice in the microcosm but bad timing in the macrocosm. And I know I'm not alone. Recession chic is actually prolonging the economic downturn. Even the uber wealthy are cutting back, and it's noticeable. But the average family can't - and shouldn't - fill the gap. The challenge is finding the balance. Isn't it always?