The Great Recession and the bulimia of US consumers: deep causes and possible ways out

Abstract

This paper focuses on the apparent bulimia of US consumers and its role in the recent crisis. We seek to show how various characteristics of American society and the US economy are related to this phenomenon. We illustrate some structural features of the US economy and public policies that may have created a difference, in terms of patterns of consumption and market participation, between the USA and continental Europe. We then present some explanations of US hyperconsumerism put forward by psychologists and sociologists, thus relating this phenomenon to the decline in subjective well-being and social capital documented in the USA. We also discuss how the negative endogenous growth paradigm may help to account for it. Finally, we review the debate on the US policy agenda by underlining some weaknesses in the two politically more realistic options and by outlining a third policy strategy, which is possibly preferable for people’s long-term well-being.