The American Dream Is Dead: The Bursting Of The Consumer Bubble

Seriously? Your claim is that the increases in food prices THIS YEAR are due to people using credit cards? You do realize that grocery stores have accepted credit cards for about two decades now? Your current monthly stats are useless to this discussion.

Your talk of loss leaders is also irrelevant. The only thing that matters is the overall profit margin of a given store. Go find the average Kroger store's annual profit margin and get back to me.

 

No I'm not saying its because of credit card use! (*)(*)(*)(*) dude get your panties out of your arse okay.

I already assuming its around 6% is what they are hoping for depending upon how the individual stores are doing in many matters if they get that or more. Then again there are multiple revunue streams I'm specifically talking about Store Floor Rates which wouldn't encompass other vehicles they may or may not have at their disposal depending upon which store you are talking about, but Kroger's being the biggest it would be wrong headed to use them as your average neighborhood store. Krogers is likely the best ran store overall, they have survive and thrived in areas alot of people didn't think they could, they sure beat the hell out of Safeway! I'm thinking Walmart isn't going to bring down Krogers or damage their sales like they do to regional operators like Food City in this area.

 

Then why bother posting those numbers since our discussion is about...credit card use?

I just picked Kroger because it is my closest neighborhood store. Feel free to produce the average profit margin for all grocery stores if you like.

The bottom line is that people using credit cards at the grocery store has had very little effect on what you pay for food.

 

Did you want to take away our credit cards before you increase the debt limit on the governments credit card or after?

 

Actually, instead of trying to quantify the 'American Dream', I might say that for foreigners they might dream about a life in the USA as immigrants compared to their current situations, and for US citizens, I might say it was the opportunity to realize their potential within the framework of a society that created opportunities for anyone who wished to put forth the effort.

I believe today in the USA that anyone who puts forth the effort can achieve most or all of their potential. For those who don't believe this...my advice is get off of your lazy asses and put forth some hard work, sacrifice, and invest the effort needed to achieve more in your lives...

 

Gee I thought it was consumerism? Yet it still doesn't take away that most use credit cards at grocery stores because they have to, in other words their budgets are push beyond their means, yea buy that 10 steak at the grocery store with a credit card and most people will end up paying 5x that by the time they catch up the credit card or file bankruptcy which isn't easy to do nowadays.

Outside of that its too common a knowledge that grocery stores operate on small margins, just to much competition not to plus people are not use to the idea of that grocery should take up more of the family budget that it does today, along with energy cost its driving the middle class to lower middle class. Non of this can be refuted the "FACT" is all too clear.

Another reason why Emperor Obama will not be elected unless the conservatives/moderate people get their vote split by a strong 3rd party vote. The idea that liberalism/progressives are making in roads to the exceptance of the American people is at its best a strawman that they would like you to think. Just like the idea that business is bad and that mean ole' Krogers and the Farmers are the ones raping the American people in Grocery Stores and that Exxon is raping the consumer over energy cost but we all know who really proftis, Big Government. With Regulations and Corporate Taxes and tons of other taxes they have achieve to drive up the cost of living and Emperor Obama is blaming everyone except those who are the real thieves of the American Treasure and that is the USA Federal Government, even States for the most part including NY has cut and cap spending and attempting to make it easier to start business, and that is Governor Cuomo doing it, including taking away fromt he Union but I don't see your precious socialist media attacking him like Christie of NJ???

 

No the federal credit card is the only that concerns me. Do what you want with yours, have at it!

 

America is still richer than western Europe, yes. However that says nothing about whether western Europe is catching up to us or not, and that certainly does not say whether the world in general is catching up to us.

I will be using data from gapminder.org for my analysis: I will be looking at the gross domestic product of the US and China divided by the number of people (GDP per capita) in each country. This gives you a good idea of how rich a country is, and GPD per capita is highly correlated with life expectancy, low infant mortality rate, and other indicators of prosperity. The data for GDP per capita is inflation adjusted, and is adjusted for the purchasing power parity of the money in each nation. I will be using the yearly GPD per Capita data for the US and China from 1950-2010. For each decade I averaged the GPD per Capita (e.g. for the 1950s I added all the GDP per Capita data for the US and divided by ten). I then present the GDP per Capita data for just 2010 for the US and China.

*****China****US*******China/US (%)
1950s*509.9****17275.325*2.952
1960s*576.1****20799.204*2.77
1970s*764.289**25634.774*2.981
1980s*1279.242*30148.159*4.243
1990s*2264.775*35345.467*6.408
2000s*4919.005*41060.701*11.98
2010*7930.707*42066.028*18.853

What this shows is that China is slowly catching up to us in terms of GDP per Capita. China does not represent the entire world but it does include 1.35 billion people which is a pretty big chunk.

 

The increase in food prices is affected far more by the surge in food stamp eligibility. With 40 million Americans now on food stamps, grocery stores are being flooded with money far in excess of what would be spent otherwise. Yes, foodstamp recipients would be buying groceries with or without assistance, but they are buying much more with the hundreds of dollars each in "free" grocery money every month. Many are also buying alcohol, cigarettes, and even more and expensive food items with the extra disposible income they have because of the "assistance." It's people like me who don't qualify for food stamps that must feed our families paying inflated grocery store prices.

 

I believe the asset of China for the USA is the additional consumers who will buy American goods. The better China does economically the more consumption it's citizens will do including imports. What the USA should focus on is reducing unemployment to 5%, greatly increasing exports, and reducing the current 60% of GDP which is personal consumption down to 45-50%. In order to increase exports we must become more competitive...

 

The problem with that to liberals is that, like most people, they realize that most people's potential is limited to minimum wage at McDonald's if a true free market was established in the nation and they don't like the idea of people being limited by their potential, they think Government should suspend the laws of economics for them to realize MORE than their potential.

Society needs to accept that most of America simply doesn't have the potential to succeed beyond a lower middle class lifestyle at most.

 

Achieving one's potential is not just about money and jobs. And, every person has a different potential therefore we cannot stereotype potential.

If we know this going in, then when government is involved, for example in public education, care should be given to consider a wide range of possibilities and not force people into convenient societal and political pigeon holes.

Maybe those you stereotype in your last paragraph above have the potential to do all sorts of things but not enough opportunities exist? And if you believe you know this statement as accurate, then this means that with this knowledge, where government is involved, they can maximize their performance to reach everyone who is interested. For those who are simply brain and body lazy...they're really not worth talking about...but hey, the world needs low level laborers...

 

WTF? How is this unique to America? And what country do most of the people succeed beyond a lower middle class lifestyle?

 

How would reducing domestic consumption increase exports?

 

"Society needs to accept that most of America simply doesn't have the potential to succeed beyond a lower middle class lifestyle at most. "


I too would like to know what you mean by this? I'm not from america, although I have travelled round the place many times, and to many states with work. I have never had a credit card, nor an overdraft nor loans. Everything I own is mine and I fail to understand the thought of borrowing money to pay back twice as much.

BUT... back to the topic, yes, the american dream is dead - and it was just a dream. I met some very nice, friendly people over there, but the majority of them are brainless. The rest of the world, and I've seen a lot of it, laugh at the 'septics' or to be polite - americans- overspending and arrogance has been the downfall of what could have been a great country.

I don't blame the great unwashed/uneducated - I blame your media and corporations. It could have been so good, but alas...

You have my sympaty, I, for one, will be fine

from England

ps. I would be classed as a 'liberal' in US politics - and I still have no idea, at 34 years of age, how that 'label' ever became a bad thing

 

And you call US brainless?

 

LOL! Lets look at your external debt as a percent of GDP. In your country it's

$8.981 trillion external debt/ $2.173 trillion GDP

while in the US it's

$13.98 trillion external debt/$14.66 trillion GDP

That's 413% for the UK, 95% for the US. Is it all nice and comfy in there in the dark. Is ignorance truely bliss?

 

"What the USA should focus on is reducing unemployment to 5%, greatly increasing exports, and reducing the current 60% of GDP which is personal consumption down to 45-50%. In order to increase exports we must become more competitive..."

I never said reducing domestic consumption will increase exports??

I said domestic consumption should be 45-50%...not the current 60%.

I said we need to greatly increase exports.

Having 60% of our GDP be personal consumption is like owning a restaurant and 60% of the customers are family members. If this 60% equals 60 family members, well they can continue to visit the restaurant, but other customers will need to be increased from 40 to 60 or 65. So their goal would be to do whatever is necessary to increase other customers...

 

All labels are a bad thing...

 

Ignorant logic. The intelligent thing to do would be to continue selling to your family AND increase other customers

 

This is EXACTLY what I said but I guess your ignorant logic is better than my ignorant logic??

"Having 60% of our GDP be personal consumption is like owning a restaurant and 60% of the customers are family members. If this 60% equals 60 family members, well they can continue to visit the restaurant, but other customers will need to be increased from 40 to 60 or 65. So their goal would be to do whatever is necessary to increase other customers...

 

The only reason the government is as big as it is is because capitalism has finally failed. I've been watching this nonsense since the Oil Shock of the 70s. Raise taxes, cut spending; cut taxes raise spending; cut taxes, cut spending. Meanwhile all the jobs went overseas so Big Business could treat workers even worse than American workers were treated in the early 20th Century. Agribusiness drove millions of farmers off their lands, so they came here, or were invited here, sometimes even bussed here to displace American workers. The few companies that remained demanded enormous concessions under the threat of moving overseas, or to more "business friendly environments." We told them to leave. WE incentivized them to leave. We concocted trade agreements to make it even easier for them to leave. We still do. And thenwhen wages were depressed enoug, our illustrious government thinkers, "learned" economists, and their business allies decided that they could restore the economy through deregulation and massive public and private debt. The derivatives formulas were so complicated it would take Stephen Hawking a month to figure one of them out. So we globalized everything, and now I hear that we have to worry because there's a housing bubble in Shanghai. Obama, a socialist? Is that really the best you can come up with? So the right says we need more of what got us into this mess in the first place, and the left says we need more stimulus 'ala the 1930s. In other words, nobody knows what to do with the world they created.
This is one of those rare moments in history where someone actually has to come up with a new idea. Because what we've been doing since I was in high school has utterly failed.

 

The average American household has lost 40% of its wealth.

Soon, all it will be able to afford is McDonalds.

Which will make McDonalds very happy.

And Americans even fatter than they are now.

 

I think we need to look at the private sector and government as two totally separate entities. The private sector derives it's energy through innovation and production stemming from demand of it's products and services. Government is supposed to look after the general welfare of it's people. If the government has 170 million people who wish to work, and the private sector only has jobs for 140 million, which leaves 30 million without work or income, whose problem are these 30 million people? Well, it's not the private sector because they are satisfying the demand with 140 million workers. So it is up to government to decide how to provide general welfare for the 30 million unemployed. The private sector does not care how government achieves this as long as government does not impede the efforts of the private sector. Government can stick it's nose into the private sector, pretending to create jobs or stimulate the economy, etc. but it will always be very small tweaks! The ONLY way those 30 million will ever be employed is if the demand of products and services on the private sector greatly increases. If the private sector is growing at 2% and government has a 15% problem, it is obvious the private sector is going to take a long time to energize 15% growth! So government is stuck with 30 million people and what to do; welfare, government spending, training, WPA, ??? When government does nothing as they are doing today, IMO it will take decades to see a majority of Americans working again. With the private sector operating in a global market, sourcing materials and labor outside of the US, this simply exacerbates the challenge.

I can guess for the 30 million above, that their best action is to stop depending on government to solve all of their problems, and to accept their income limitations, create or change their lives in order to sustain themselves on much less, and carve out a niche the best they can. Those who refuse to do this will never find happiness and will always be a burden on the nation...

 

The very simple solution is for people in this situation to create a lifestyle based on 40% less...no matter how challenging this might be. Doing nothing to adjust for the long-term and continuing to complain solves nothing...