Getting Off the Road to Ruin

The Metropolitan Life Insurance Company recently released a study of the effect of the current economy on American's finances. The study came up with some disturbing facts, such as that that about three-quarters of the population has three months or less of savings to draw on in the event of unemployment.

The most interesting thing we found in the study was the conclusion that Americans are shifting away from Consumerism toward a more balanced view of what will make them happy. We see this as a tremendously positive development. Among other benefits will be an increased savings rate and the potential to have both households and the economy as a whole on a more secure footing.

Over fifty years ago in The Affluent Society, J.K. Galbraith predicted that if the Great American Marketing Machine was unable to manufacture ever more consumer wants to keep household debt expanding, a depression would ensue. We suspect that his prediction may have finally come true.