For example, households are rapidly getting rid of expenses they can no longer afford, due to either joblessness, low wages or lack of credit. They are thus saving more than they are spending. For an economy that depends on 70 percent consumer spending, this is a huge problem, not only for the US, but for the world as well, since many countries constructed their economies as export machines directed towards US consumers.
Is this problem likely to go away anytime soon? Probably not. The recession is creating such dramatic effects on so many people that the consuming culture is being changed, much like what happened after the Great Depression. The New York Times notes:
“...forces that enabled and even egged on consumers to save less and spend more - easy credit and skyrocketing asset values - could be permanently altered [!] by the financial crisis that spun the economy into recession.” (May 9, 2009)
If the US consumer can no longer be the driving force of the economy, what will replace it? The elitist Economist magazine offered a cure: because consumer spending will be debilitated, “something else will have to grow more quickly. Ideally that would be exports and investment.” (May 6, 2009)