In the end it comes down to the individual consumer and his propensity to spend beyond his capacity to repay. That goes to his consumption but it also goes to his housing aspirations as well as housing availability. Beyond that it goes in large measure to the encouragement of our consumer society to spend beyond sustainable capacity to repay. And it seems to me that some public intervention might be warranted to try and cool expectations which seem to be running wildly ahead of reality. This might require government intervention in advertising to protect people from themselves. It has been done with tobacco and alcohol. Spending beyond your means is just another disease.
I look around and see lifestyles and housing aspirations way beyond anything like average in my generation,, and it does not surprise me to see the American outlook and I suspect it is not very different to what the outlook is for our generations coming up.
