I have opined many times in this blog that the prosperous times over the last 15 years or so was a figment of our collective imagination because it was not built on actual wealth but rather on debt. Lots of debt that was spurred by government-pushed subprime mortgages that let people use their homes like ATM machines. Well those times are over, albeit the aftermath is not, and people are doing what they should have been doing all along - and something our government sure hasn't learned yet - live within your means and don't spend more than you have:
From the Wall Street Journal: Middle Class Slams Brakes on Spending. Here's the data:
From the Wall Street Journal: Middle Class Slams Brakes on Spending. Here's the data:
Middle-class Americans made their deepest spending cuts in more than two decades, slashing spending on such discretionary items as restaurant meals and alcohol during the recession.It's what they should have been doing all along. And I'm saying that as a member of said group that has also clamped down significantly on spending starting in 2008.
Households in the middle fifth of the population sliced their average annual spending to $41,150 in 2009, the Labor Department said Tuesday in its annual spending breakdown. That was down 3.1% from 2007 and 3.5% from 2008, the steepest one-year drop since records began in 1984. The drop came even as those households' after-tax income remained relatively stable over the two years, at an average $45,199.
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