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With near unanimous concern over the state of the economy, Americans are reportedly turning to a tactic known as “doom spending.”
A recent report via CNBC provides important context to an aspect of the economy that the Joe Biden administration has been touting for some time – consumer spending.
CNBC notes that such spending remains resilient in the face of overwhelming economic concerns. Circumstances so harrowing that a recent report by Intuit Credit Karma shows that 96%(!) of Americans “are concerned about the current state of the economy.”
And yet, they continue to shell out personal finances.
The report shows a solid 27% are not only still spending money, but are engaged in “doom spending” as a means to cope with the stress of their economic and geopolitical concerns.
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Americans Are ‘Doom Spending’
Courtney Alev, a consumer financial advocate at Credit Karma, wants you to know that “doom spending” is no way to cope with a terrible economy.
“Much like doom scrolling, we’re seeing people mindlessly shop to soothe concerns about the economy and foreign affairs, which could take a toll on their financial well-being,” she explained.
That could apply to the government as well when one thinks about it. Mindlessly spending on foreign wars while taking a toll on the American taxpayer’s well-being. Bidenomics = Doom spending.
So what is this “doom” that has Americans so stressed out that they’re willing to blow their savings or extra money on anything to make them happy?
According to the study, top concerns include inflation, cost of living increases, and unaffordable housing. Can’t see why those things would be stressful.
Then there’s this minor issue – Nearly half (48%) say “not having enough money to afford necessities like food, clothing, and rent worries them the most” amid a poor economy.
White House Has Been Celebrating Consumer Spending
People are worried that they can’t afford the necessities of life. They are in such a dismal financial malaise that to make themselves feel better about struggling to get groceries, they’re Black Friday shopping for televisions and laptops at Walmart.
A record 200 million shoppers turned out between Black Friday and Cyber Monday, according to the CNBC report, with holiday spending expected to reach record levels, totaling up to $966.6 billion.
On a related note, the Biden administration continually points to consumer spending as a driver of the economy. From a White House blog post one month ago today:
“Consumption spending makes up two-thirds of the U.S. economy on average, so as the U.S. consumer goes, so goes the U.S. economy. The second set of bars shows that the biggest surprise in the performance of the economy since this time last year has been that the US consumer has continued spending robustly: real consumption spending grew almost 2 percentage points more than expected at this time last year (2.4% vs. 0.5%).”
A significant portion of that is the aforementioned “doom spending,” or spending of money that people don’t actually have.
Eventually, however, those credit card bills are going to come due, and an already difficult financial situation for consumers will become worse.
Then again – Maybe it’s “doom spending,” and maybe it’s a narrative from the White House that, as with student loan debt, it’s not important to pay your bills.
Could consumers view their credit card spending as a bill they could simply eschew when the time comes, and that’s why they’re using them at record rates to counter higher costs of living?
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