I distinctly remember the Christmas of 2007. It was unique from every other holiday season that I experienced in my childhood. For my family, every Christmas was normally a gluttonous buffet of consumer spending as each person made sure to buy a mountain of gifts to cover everybody else, even though we were far from wealthy. I’m willing to bet that this habit of decking the halls with maxed out credit cards was shared by many other middle class American families at the time.
By 2008, however, we quickly changed our tune. The financial crisis made it apparent that our annual gift buying binge wasn’t just wasteful and unessential to the spirit of Christmas, it was also no longer affordable for us. That year we mutually agreed to cut the exorbitant spending down to shadow of what it once was; and, thankfully, we never looked back
Unfortunately, it appears that most Americans are falling back on their old holiday spending habits, even though they probably can’t afford it. According to a recent Gallup poll, the average American family is planning on spending almost as much money this Christmas as they did just before the crash of 2008.
Last month, Gallup asked Americans the same question and received an average of $812, which was also the highest they had seen since 2007. But what makes this so shocking is that normally these polls see Americans scaling back their spending estimates between October and November, whereas this year it went up.
Meanwhile, the media is reporting on this like it’s a good thing. They see higher consumer spending as a sign that the economy is improving, when they should be viewing it as an indication that our economy is riding another bubble.
You have to keep in mind that a lot of these people can’t afford this. The percentage of Americans who are working now is lower than it was in 2007, and it’s still falling. In addition, most of the jobs that have been created since the crash pay far less than they did before. The entire middle class is being hollowed out, and yet we’re apparently spending money like it never happened. Perhaps it’s no surprise that credit card debt is rising, and overall consumer debt is through the roof.
Essentially, our culture hasn’t learned anything from the crash of 2007/2008. We still spend like there’s no tomorrow. It could be forgiven for people who are struggling to get by in our low-wage economy, but this latest Gallup poll implies a different kind of spending. This is Christmas money we’re talking about. While I’m sure there are plenty of useful things being bought during this time of year, most of them are non-essential goods. Americans still like to buy things they don’t need with money they don’t have.
That means there is nothing sustainable behind this new surge of consumer spending. It’s just another sign that we’re burying ourselves under more debt that will never be fully repaid. And more unsustainable debt is of course indicative of a bubble. Enjoy these relatively good times while they last.
Joshua Krause is a reporter, writer and researcher at The Daily Sheeple. He was born and raised in the Bay Area and is a freelance writer and author. You can follow Joshua’s reports at Facebook or on his personal Twitter. Joshua’s website is Strange Danger.