A Changing American Dream?

I might be pushing this with an article from a website as esteemed as Yahoo, but I have no doubts that the wars we've been having have at least done some damage to our economy (If you are having trouble understanding what I am saying, then you have missed the tone here).

Perhaps it's not so much important that America's standard of living is not going to do well, but that countries around the world are evening out with it. This is a good sign. It's no argument to convince a co-immigrant mother who seems to have unshakable faith in the American dream (money!), but it's something to keep in mind, at the very least.

"Worst Is Yet to Come:" Americans' Standard of Living Permanently Changed

Posted Feb 17, 2009 12:53pm EST by Aaron Task in Investing, Recession

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There's no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment.

But "the worst is yet to come," according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American's standard of living is undergoing a "permanent change" - and not for the better as a result of:

• An $8 trillion negative wealth effect from declining home values.
• A $10 trillion negative wealth effect from weakened capital markets.
• A $14 trillion consumer debt load amid "exploding unemployment", leading to "exploding bankruptcies."

"The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car," Davidowitz says. "A lot of that is gone."

Going forward, the veteran retail industry consultant foresees higher savings rate and people trading down in both the goods and services they buy - as well as their aspirations.

The end of rampant consumerism is ultimately a good thing, he says, but the unraveling of an economy built on debt-fueled spending will be painful for years to come.

Source: Yahoo News.

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