Consumer Debt and the Coming Recession

For those that pay attention to such things, the news is filled with extreme views about the current and future state of the economy. At the same moment in time, there are pundits arguing that most Americans are in abject economic misery, while others argue that life has never been better economically. One group is arguing that imminent economic doom is upon us, another tells us that things are only going up from here.

If most of us are honest, in the decade since the Great Recession, things have generally gotten better for most people. However, in many cases, people do not feel great about the economy and, at the same time, are setting themselves up for problems during the next recession.

The Inevitability of Recessions and Stock Declines

News reports predicting a coming economic recession or a significant stock market decline are correct. They have no idea when those things are going to come, but some sort of economic perturbation is pretty much inevitable.

One of the more interesting aspects of our attention economy is that when the next economic dip happens, its significance will be determined, in large part, by how people respond. For example, if people get skittish and sell during a stock market decline, that will make the stock market decline even worse. If people alter their consumer behaviors radically during a recession, that is likely to make the recession worse.

More significant than whether and when a recession is coming (it is and who knows) is how we are living day to day in anticipation of those events.

A Plea for Simple Living

There is no question that some people are struggling to meet basic necessities already. Due to a medical condition, loss of a job, a very low wage job, or bad debt choices earlier in life, many people are living paycheck to paycheck. If that is you, then feel free to check out. This post is written to the vast majority of us who are in the middle class and have some economic margin.

We once received a gift subscription to a magazine called Real Simple that amounts to an advertisement for a high-end consumeristic minimalist lifestyle. All the pictures were of perfect rooms with “simple” solutions to problems like magazine storage or whatever, but the solutions always cost hundreds of dollars. The result was an aesthetic simplicity, but that’s not how they got there. According to that style magazine, simplicity is a consumer good that is really expensive.

Simple living is less about what stuff you own and more about what activities and services you deem necessary. Simple living at its best is simply asking what aspects of life are necessary and eliminating those that don’t fit that definition. Another definition is that simple living is asking what we do that glorifies God and minimizing the extras.

When we stop asking risk vs. reward questions about our lifestyle choices, we put ourselves into the situation like the couple making $160,000 who were described as living in “modest oppression” because they “couldn’t afford” everything they wanted. Alyssa Quart’s description of the largely self-caused mental and emotional stresses of the middle class in her 2018 book, Squeezed, should serve as a warning to rational minds to make better choices.

As Christians in the American middle class, we really need to begin asking “why” questions if we are going to be effective stewards of our time, treasure, and opportunity. We have the means to get the gospel to the ends of the earth and instead we are spending our money to overflow landfills with useless plastic.

The simple life is about being focused on what adds gospel-value to the world and spending our money on that.

Avoiding Comparisons

Also in Squeezed, Quart writes, “While Americans overall may live better than medieval aristocrats could even dream of, that means nothing when oligarchs live next door, flaunting their luxurious homes.”

The funny thing about comparisons is that we tend to make them with those living above our means. Very few of us look at those who are legitimately struggling financially and go home thankful for our abundance. Instead, largely due to the mystique of television and movies in which everything is always perfect, we continually moan about the inadequacy of our resources.

There is a reason God gave us the 10th Commandment.

Did you have a nice vacation at home? Well, the other guy at work took his kids on a safari adventure. Now that vacation doesn’t look so good.

Does your daughter enjoy soccer? The neighbor down the street does, too, so they’ve invested thousands into clinics, travel teams, physical training, and other goods and services designed to get their child ahead. Suddenly the local rec league isn’t very compelling.

There isn’t necessarily anything wrong with a big vacation or pursuing excellence in sports, but those are often excesses that we try to have without making sacrifices to compensate.

The result is that many people who are making a whole lot of money are spending all of it and a little bit more.

Rising Debt Loads

One of more frightening statistics, in my opinion, is the rise in household debt to the levels prior to the 2008 recession.

The Great Recession was rough for a lot of people in large part because people were up to their ears in debt when the problem started. For a few years society seemed to learn a lesson, but now it appears that we have forgotten.

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I’m not on the “no debt ever” train, for a variety of reasons. However, I do believe that we typically position ourselves better to survive economic downturns if we minimize debt and seek to eliminate it when times are good.

A lot of the debt right now is being driven by a perception that the stock market is going to keep going up and up. In the long run this is probably true, but there may be a point at which half of the money invested in the market will “disappear” just like it did in 2008 and 2009. That is never a great feeling, but it is a really terrible feeling when you know that your pay is likely to stagnate for a while, you may lose your job, and the company bonus you budgeted to pay for your vacation is unlikely to materialize. In other words, when you are up to your ears in debt, the clouds of economic doom look a lot more ominous.

Market expert is not a title I’d claim, but I remember the pain of debt-ridden people who had a high salary but large payments and weren’t seeing the economic growth they were counting on. One way to eliminate that pain is to avoid debt and eradicate it. To do that, we should consider the common causes of debt.

The Cause of Debt

The problem most middle-class Americans have is that they are spending too much on things that they enjoy too little and bring too little glory to God.

Instead of comparing ourselves to our neighbors, we ought to be regularly asking of every expenditure how this glorifies God. We will certainly get things wrong from time to time, but a gospel-focused consumer mind will likely resist the urge to overspend on things that really do little good for anyone.

Once we get above a certain financial level, most debt is driven by buying more car than we need, a nicer house than necessary, services that we only use occasionally, and products that offer little benefit in the long run. Evaluate your household spending for the last year with a critical eye and this will likely become self-evident.

This means that rather than being trapped in system that makes us do bad things, we are in a culture that encourages us to do dumb things and we usually don’t invest the will power to stop.

For most of us, our debt is a problem we have created by being unwilling to limit our consumer choices to that which glorifies God.

We are setting ourselves up for misery in the future with our choices today. Why not begin making simple, better choices that will leave us happier when the next downturn comes?

Counter-Consumeristic Christianity

If you’ve been paying attention to the online arguments in the past few years, you’ve probably seen Christians arguing about how we should relate to the world around us. (If you haven’t, it’s okay, but I’m going to write about it anyway.)

Some argue for a form of withdrawal from society to catechize, where we function in distinct communities but still seek to serve the world around us. Others argue we should continue to go about our business on a daily basis and not differentiate ourselves overtly from the world; our presence in society as believers should serve to draw evangelistic interest. Still others have a more overt interest in Christianizing enterprises and doing them openly and overtly for Christ.

All of these are variations on a common theme. All of them are trying to answer a very important question:

“How do we serve Christ faithfully in a world that often actively and passively dishonors him?”

That question is a vital one, but it is too big for a single blog post. However, I argue that a significant part of honoring Christ in our daily lives, no matter our overarching understanding of the place of Christianity in the public square, is becoming Counter-Consumeristic.

What is Consumerism?

Definitions of consumerism vary depending on where you look and who you are asking.

For the sake of simplicity, I will define consumerism as an inappropriate concern for material comfort especially through the pursuit of material goods.

Consumerism is all about the buyer. The goal of consumerism is to buy whatever you need to make you happy.

Used by CC License: http://ow.ly/Ex0a30jLu5b

Used by CC License: http://ow.ly/Ex0a30jLu5b

In its best forms, consumerism leads to a focus on purchasing benefiting the needs of the customer.

However, consumerism is most often evidenced in Western society by acquisitiveness. Particularly in the United States, consumerism tends to be about getting more stuff or having better experiences.

Advertisers spend billions of dollars each year trying to explain why their product will make you happier, thinner, better, taller, prettier, or whatever.

Sometimes advertisers are marketing legitimate products that do offer real benefits. However, often, if someone has to advertise their product heavily, they are selling something you don’t really need.

Consumerism is a mindset that falls into the advertiser’s trap by believing that getting that new thing—whatever it is—will make life just a little bit better. Consumerism is a way of falling into the trap of believing that anything besides Christ is truly fulfilling.

Counter-Consumeristic Christianity

Given my definition, with which you are free to disagree, you can see why I believe consumerism might be something to be resisted.

Others on the world wide web agree with me, and some of those others call for Christians to become minimalists. Minimalists are people who try to own only those items they need right now.

Minimalism is great if you are wealthy and can purchase multipurpose devices and be sure you will have resources to replace broken objects without digging a previous model out of the closet. (This is, incidentally, one of the reasons why hoarders tend to be poor people.)

However, Christian resistance to consumerism is less about not owning objects but examining the reason why we own them.

As Christians, we are called to do everything for the glory of God. (1 Cor 10:31) This is a truism and often over-quoted (perhaps even here), but in this context, it means that what we purchase and own should be done for the glory of God.

Therefore, owning a car is fine if we do it for the glory of God. Now, the task for the Christian is to explain why purchasing a shiny new sports car with heated seats, built in massagers, and a microwave to replace the serviceable family sedan glorifies God. Or, for another example, to explain why buying a semi masquerading as a pickup truck to haul the boat you use three weekends of the year glorifies God.

Counter-Consumeristic Christianity entails resisting the myth that more is better and that the next purchase will unlock your best life now. It doesn’t mean you can’t purchase objects that you enjoy or that make life easier, but it does cause us to evaluate our priorities. If you can find a way to justify how the sports car glorifies God, then go ahead.

The essence of becoming Counter-Consumeristic is creating an internal filter before spending money that asks, “How will this item, service, or experience glorify God in my life?”

If you don’t have a good answer for that, don’t spend the money. It’s that simple.

Conclusion

There are a couple of practical reasons to become Counter-Consumeristic Christians. First, consumerism often leads to unsustainable spending habits. Second, consumerism often leads to improper environmental stewardship and wastefulness. Third, consumerism often increases the work required to take care of our stuff; it makes life harder instead of easier. These are all good reasons to avoid consumerism.

More significantly, however, I believe that when Christians become consumeristic it sends a clear message that our hope is in something other than Christ.

When the only differences between our lifestyle and the world around us are that we go to a special building on Sunday and don’t swear, it really leaves us with very little real witness.

There’s more to a sanctified Christian life than being Counter-Consumeristic, but it is certainly part of the mix.