Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Living Well

Americans Are Still Overwhelmed by Excess

America is the land of plenty. Unfortunately these days, that often means plenty of foreclosures, bankruptcies, childhood obesity, greenhouse gases, stress, and even plenty of debt. We have so much debt that on January 6, Treasury Secretary Timothy Geithner said that Congress needs to raise the federal debt level beyond the existing $14.29 trillion ceiling during the first quarter of 2011 or risk defaulting on U.S. debt and losing access to global credit markets.

Whether the solution is for the government to cut spending or raise taxes, the nation has a problem: Americans' eyes are bigger than their stomachs. Given an obesity rate of 34 percent, that's saying a lot. As any Econ 101 student knows, it's not that debt in itself is bad. Credit can be a good thing if used carefully to increase purchasing power for such useful things as home mortgages or new factories. The problem is that we have too much. That question of scale applies across the board to everything from food to education to technology to just plain stuff. Too much of anything is bad for us, as individuals and as a society. From a nation of self-sufficient farmers and thrifty merchants we have evolved into a country where we not only want more than we have but too often want more than is good for us.

Our lack of restraint as individuals has contributed to some serious economic, ecological, and social challenges. Compulsive shoppers, for example (the U.S. has an estimated 19 million to 28 million of them, reported, agonize over credit card debt. In 2007 household debt reached nearly 100 percent of gross domestic product, according to Credit Suisse. About one-third of America's adult population qualifies as obese, yet maintains unhealthy eating and exercise practices; only about four percent have much chance of losing enough weight to achieve mere "overweight," status, say Harvard researchers.

As natural and economic limits have expanded—a process fostered by technology—many things that were beneficial in moderation have become problematic in excess.

"Temptations Far More Evolved"

It's not just a matter of greed. "It is a time of extreme affluence and technological empowerment. This empowers all of our desires, including those we don't prefer," Daniel Akst, author of We Have Met the Enemy: Self-Control in an Age of Excess (January 2011, Penguin Press), tells "It's not that we have less willpower than we used to, but rather that modern life immerses us daily in a set of temptations far more evolved than we are," he writes in his book.

These temptations drive our economy: Real GDP nearly doubled in the 25 years from 1984 to 2009, according to data from the Bureau of Economic Analysis. That boom followed broad awareness of conspicuous consumption in the U.S. In 1955, economist Victor Lebow wrote a seminal article in the Journal of Retailing. "Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfactions, our ego satisfactions, in consumption," he wrote.

Some economists that include 2001 Nobel Prize winner Joseph Stiglitz have been trying to identify the limits of GDP as an indicator of economic performance and social progress while developing an alternative way to measure social well-being.

Indeed, greater economic growth does not lead to a happier, healthier, or more successful populace, according to research by the Equality Trust, a London nonprofit that has found no relationship between income per head and social well-being in rich countries. Trends such as increasing stress and declining levels of happiness over the last 30 years suggest that abundance has not contributed to our sense of well-being.

"The Myth of Growth Has Failed Us"

Assumptions about the benefits of increased economic activity must be questioned, says Tim Jackson in Prosperity Without Growth: Economics for a Finite Planet (Earthscan Publications, December 2009). "The modern economy is structurally reliant on economic growth for its stability," he writes, and when growth falters, politicians panic, businesses struggle to survive, people lose jobs and homes, and a spiral of recession looms. "The myth of growth has failed us," concludes Jackson.

So if abundance doesn't guarantee well-being, why do we crave more? To start with, economics tells us that human wants are infinite, even though resources are limited.

Moreover, says psychoanalyst Adam Phillips, our fascination with excess results from fear that whatever it is we desire could go away, run out, or be taken by someone else. Our true appetites are sensible, even as many pursue huge appetites in fantasy, he writes in the Guardian. We develop an excess of appetite to protect ourselves from fear of frustration and helplessness.

Akst: Freedom vs. Self-Control

Following years of excess that led to the financial crisis and recession, we have returned to a period of restraint, Akst says, but societies tend to oscillate between indulgence and control. In the future, he expects, "we will see more freedom, not less, which will make [self-control] a greater challenge." As Americans have learned to embrace their desires and break away from stern Puritan traditions, "the only thing left is to avoid killing ourselves with our newfound freedom," Akst writes.

An economy can continue to expand without significant negative repercussions, says Augustine Faucher, director of macroeconomics for Moody's Analytics. But unlimited excess cannot be enjoyed by the majority of people over the long term. "At one level, social progress amounts to making the luxuries of the few the staples of the many," says Sam Pizzigati, associate fellow at the Institute for Policy Studies in Washington. "But at the environmental level, our earth cannot sustain unlimited excess. The planet cannot survive five cars in every garage."

How to enforce moderation is a thorny issue. Excess is encouraged, Pizzigati says, when the wealthy are given "outrageous rewards to behave outrageously" in business, for example. He notes that U.S. tax rules do not encourage an even distribution of wealth. "We can live decently, as healthy societies, with modest inequality. Extreme inequality, as we have today, endangers us," Pizzigati adds.

Countries with greater income inequality—even wealthy nations such as the U.S.—have higher rates of mental illness, illegal drug use, obesity, and social immobility than do countries with more equal distribution of wealth, such as Japan, according to research by the Equality Trust.

While American indulgence may have caused major imbalances, the bright side is that excess is controllable—though not without difficulty—says Akst.

Parents, religious authorities, and social norms once dictated behavior. Still, there are rays of hope. Americans' personal credit-card debt has declined on average from a high of $5,776 in the first quarter of 2009 to $4,964 in the third quarter of last year, according to TransUnion. If only the federal government could exhibit comparable self-control.

Click here to see 20 good things we may have too much of.

Wong is an associate editor for Bloomberg Businessweek. Follow her on Twitter @venessawwong.

blog comments powered by Disqus