Slowdown in American Economy Could Be Good for the Environment

In America, consumerism is rampant, no doubt about it. We’ve been bred to buy, buy and keep on buying even if you really don’t need anything else. We constantly ‘upgrade’ our stuff. Decades of cheap credit have allowed this monster to continue growing at a rapid pace, with people spending far more than they can afford with the plan of dealing with it later. So, now that the economy is finally slowing down and people are buying less, what does it mean for the American lifestyle, and for the environment?

From U.S. News & World Report:

The average American with a credit file is responsible for $16,635 in debt, excluding mortgages, according to Experian, and the personal savings rate has hovered close to zero for the past several years. High gas and food prices are causing real incomes to fall. Even worse, rising inflation will probably cause the Federal Reserve to start jacking up interest rates once the credit crisis on Wall Street has passed, tightening credit even further. “We’re shedding jobs, it’s much harder to borrow, and what used to be capital gains are now capital losses,” says Scott Hoyt, senior director of consumer economics at Moody’s Economy.com. “There’s no source of funding for spending.” Because many of us won’t be able to as easily use our homes as ATMs, Hoyt expects to see an upward trend in saving and slower growth in consumer spending, compared with the binge of the past decade.

While some people view this as devastating – seeing their frequent trips to the mall, electronics purchases and kitchen renovation plans going up in smoke – others see it as our salvation. Young people, in particular, are learning to do more with less, and that could mean less waste down the road. Parents are teaching their kids that making smart financial choices can help the earth, too. Frugality and things like buying secondhand, growing your own vegetables and nixing bottled water complement each other perfectly. It will be interesting to see whether Americans take this opportunity to be smarter about their money and the earth, or go back to their old habits as soon as things are stable again.

Link [U.S. News & World Report]
Photo credit: Flickr user orphanjones

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