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I'm interested to know if you guys think that this economic crisis will have a lasting impact on American consumerism and debt levels. Or, do you think that people will go right back to running up massive debt when the crisis passes? I don't think the banks and credit card companies will allow debt ratios to rise to pre-crisis levels. I tend to think that the system will control debt limits but that individuals will still try to get everything they want, generally speaking. Your thoughts?
I think it will have an effect on short term to medium term spending. People have realized they can't keep high debt levels to finance expansive lifestyles, or barely holding businesses, and there is not enough credit to go around even if they wanted to. Things will start to creep back though. People want to live in big houses and drive expensive cars and eat at fancy restaurants. Even those who went to extreme frugality will realize that farming is hard, and it can be very expensive (in time and money) compared to large operations that sell even at Whole Foods.
Things will eventually creep back, and are even starting to in some instances. You can see it in the new conspicuous consumption for "green" products, which some command a massive margin so people can show off to their friends how environmentally conscious they are.
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