What's wrong with our consumption culture?
MARQUETTE -- It's been said that he who pays the piper calls the tune. According to economic specialists, the U.S. these days is not calling anything.
NMU economic professor Jessie Wright says the U.S., in the last decade, has spent too much and borrowed too much. Our foreign debt has hurt our ability to provide world leadership and now China is stealing our spotlight.
Wright says quite simply, we've become too greedy.
"We have a consumption culture," explained Wright. "We have expressions like, 'shop till you drop', 'have it your way', 'he who dies with the most toys wins'. OK. That's emblematic or indicative of a consumption culture and that causes us to spend too much."
According to Wright, foreign countries that need to cover our debts are taking over our local assets. Chinese advancements in the U.P. can be seen in the controversial Eagle Mining Project, where a Chinese company is partnering with Rio Tinto.
In the past decade, while Asian households saved about 25 percent of their disposable income, here in the U.S., we saved a mere 2.3 percent. Wright says we are to blame for our economic downfall.
"We developed these new financial instruments for financing consumption, for example home equity loans and the ubiquitous credit cards," he says. "Everybody has four or five credit cards, some people are maxing them out and why we're doing that now, I don't know!"
Wright says the only solution is deleveraging--reducing our use of financial instruments and save, save, save!
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