This week's Economist featured the first in a series of articles on rebalancing the world's economy, this week focusing on America. It shows starkly something that we all know, that the current US economy is unsustainable. The main culprits, over-consumption, and excessive borrowing. The two graphs make this clear as day. Since 1946 the US has been consuming and borrowing, borrowing and consuming. One day it was sure to unravel.
The silver lining goes to the environmentalists like us who see consumption, particularly the mall and Wal-Mart type, as a bad habit. Even if rabid consumers won't stay away from the unnecessary goods for environmental reasons, they will probably have to for economic ones. The biggest task will be to ensure that the same pattern of consumption and borrowing doesn't repeat itself when the good times come.
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