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Money makes the world go round! The macroeconomics of (un)sustainable consumption



During the years since the 2002 Earth Summit in Johannesburg, the issue of sustainable consumption has come to occupy an increasingly prominent position within global environmental politics. The United Nations Environment Program in particular has played a pivotal role advancing this agenda through its flagship initiative known as the Marrakech Process. This dialogue has though engendered a great deal of conflict over the extent to which contemporary consumption practices need to be transformed and who should be responsible for doing so. A somewhat separate source of disagreement has centered on efforts to define sustainable levels of consumption in accordance with ecological determinants. This paper seeks to redeploy the notion of sustainable consumption in more practicable macroeconomic terms. Such a framework offers the potential to forge links between proponents of sustainable consumption and economists concerned with more customary measures of overconsumption: the decline of household savings, the accumulation of large government budget deficits, and the growth of negative trade balances. Data from the OECD is used to identify affluent nations that are consuming at fiscally unsustainable levels. The United States is an exceptional case of a country living substantially beyond its means and this situation could have profound consequences for the rest of the world. Money makes the world go around, the world go around, the world go around, Money makes the world go around, it makes the world go round.
Aplinkos tyrimai, inžinerija ir vadyba, 2008. Nr. 3(45), P. 42-53. ISSN 1392-1649
Environmental Research, Engineering and Management, 2008. No. 3(45), P. 42-53.
Money Makes the World Go Round! The Macroeconomics of
(Un)sustainable Consumption
Maurie J. Cohen
Sustainability Research Institute, School of Earth and Environment, University of Leeds, United Kingdom
(received in June, 2008; accepted in September, 2008)
During the years since the 2002 Earth Summit in Johannesburg, the issue of sustainable consumption
has come to occupy an increasingly prominent position within global environmental politics. The United
Nations Environment Program in particular has played a pivotal role advancing this agenda through its
flagship initiative known as the Marrakech Process. This dialogue has though engendered a great deal of
conflict over the extent to which contemporary consumption practices need to be transformed and who should
be responsible for doing so. A somewhat separate source of disagreement has centered on efforts to define
sustainable levels of consumption in accordance with ecological determinants. This paper seeks to redeploy
the notion of sustainable consumption in more practicable macroeconomic terms. Such a framework offers
the potential to forge links between proponents of sustainable consumption and economists concerned with
more customary measures of overconsumption: the decline of household savings, the accumulation of large
government budget deficits, and the growth of negative trade balances. Data from the OECD is used to
identify affluent nations that are consuming at fiscally unsustainable levels. The United States is an
exceptional case of a country living substantially beyond its means and this situation could have profound
consequences for the rest of the world.
Money makes the world go around,
the world go around, the world go around,
Money makes the world go around,
it makes the world go round.
A mark, a yen, a buck or a pound,
a buck or a pound, a buck or a pound,
Is all that makes the world go around,
that clinking clanking sound,
Can make the world go round.
From the musical Caberet (1966)
1. Introduction
The past two decades have seen growing
appreciation of the role of consumers in the current
phase of globalization.[1] Within the field of
sustainable development, this understanding first
began to coalesce during the preparatory conferences
that paved the way for the 1992 Earth Summit in Río
de Janeiro.[2] After considerable debate, an entire
chapter of Agenda 21, the conference’s action plan,
was devoted to the issue and the document stated that
“[a]ll countries should strive to promote sustainable
consumption patterns” and went on further to
encourage developed countries to assume primary
responsibility for leading the way.[3] The United
States and other affluent countries greeted this call for
the public regulation of consumption with a
combination of anger and exasperation. In the years
that followed, the Organization for Economic
Cooperation and Development (OECD) and several
other secondary policy-making bodies sought to focus
the discussion around a practical set of initiatives
designed to reduce the adverse effects of
consumption.[4] This period also saw the circulation
of a series of statements by major scientific societies
on the ecological consequences of contemporary
consumption practices and the publication of the first
Money Makes the World Go Round! The Macroeconomics of (Un)sustainable Consumption
wave of studies examining global environmental
problems from this novel perspective.[5]
A decade later, at the 2002 Johannesburg
Summit, sustainable consumption was again a major
theme and a key conference pronouncement called
upon the United Nations Environment Program
(UNEP), in conjunction with the United Nations
Department of Economic and Social Affairs
(UNDESA), to formulate a ten-year framework of
programs to support this objective. After a period of
consultation with government representatives,
academic experts, and nongovernmental organizations
(NGOs), an international experts meeting was
convened in Morocco in 2003 to launch what has
subsequently come to be known as the Marrakech
Process. The aim of these discussions is to forge a
comprehensive international plan by 2011 to guide
over the following decade the implementation of
policies and programs to encourage sustainable
consumption (and production) at national and regional
levels. UNEP has concomitantly convened a tandem
series of stakeholder dialogues in Latin America and
the Caribbean, Africa, Europe, and the Asia-Pacific
area to develop regional perspectives related to this
issue.[6] Separate from the Marrakech Process, a
number of national governments and transnational
institutions have created new forums to consider the
social and environmental implications of
contemporary lifestyles and issued national
sustainable consumption plans.[7]
Despite growing recognition of the vital role of
consumption in the design of projects to facilitate
sustainable development, policy makers have been
reticent to endorse initiatives that would impose
explicit obligations on consumers. The preferred
course has instead been to stress the merit of
enhanced product information through, for instance,
the creation of new labeling schemes.[8] Another
common, but potentially problematic, strategy has
been to recast sustainable consumption in terms of its
more affable companion notion—“sustainable
consumption and production.” This rhetorical
maneuver has the effect of gesturing toward the flaws
of contemporary systems of consumption, but of then
limiting engagement to the customary menu of
producer-led approaches: eco-efficiency, cleaner
production, integrated product management, industrial
ecology, and ecological design. In other words,
immediate redeployment of the more familiar
“production angle” expunges any conceptual
advantages that might accrue from seeking to
understand contemporary challenges from the
standpoint of consumption.[9]
At least four factors are responsible for the
diffident political uptake of sustainable consumption.
First, it is difficult to publicly critique prevailing
consumption practices without inviting charges that
one is seeking to undermine the sovereignty of
consumers or to question the goal of continuous
economic growth. Second, proponents of sustainable
consumption have yet to arrive at a common
understanding about whether their overriding aim is to
modify the quality of consumption or to its reduce its
quantity. This is not merely a matter of tactical or
semantic significance, but rather speaks to whether
the ultimate goal of sustainable consumption is to
pursue incremental performance improvements or to
strive for more ambitious redesign of entire
sociotechnical systems of production and
consumption. [10] This lack of consensus on the
quality vs. quantity issue has stymied the
development of cogent strategies and the formulation
of coherent guidance to national governments and
international agencies. Third, for many developing
countries (and some NGOs), sustainable consumption
is not about the adverse effects of overconsumption
among relatively affluent consumers, but rather is a
concept for drawing attention to chronic and
persistent underconsumption around the world. The
point therefore is to demand redistribution of
resources so that the majority of the planet’s
population could increase its consumption to levels
that would allow adequate satisfaction of basic needs.1
Finally, the “science of sustainable consumption”
remains contested and there is no common agreement
on how to determine economic or biophysical
thresholds of what might constitute “acceptable”
levels of consumption.[11]
Despite these unresolved dilemmas and ongoing
debate, there is a widespread sensibility that
contemporary consumption practices in affluent
nations (and increasingly in major developing
countries such as China and India) are incompatible
with sustainable development. Pressing concerns
relating to climate change and growing recognition of
the need to massively reduce greenhouse gas
emissions are important factors contributing to this
view. However, most policy makers consider
substantive strategies for actually moving in this
direction to be politically problematic, strategically
imprecise, and scientifically indeterminate. These are
serious liabilities for any policy proposition and they
powerfully challenge the warrant of promoting such
an endeavor in the first place. Are there though
practicable, but yet untested, ways to further consider
the efficacy of calls to modify prevailing modes of
One of the more perplexing questions
surrounding the evolution of sustainable consumption
as a policy issue has been the way in which its
proponents have tended to disregard the financial
aspects of acquiring goods and services. The
sustainable consumption problematique has been
1 These differences on how to interpret the policy objectives
of an “international sustainable consumption agenda” are
grounded in the fact that on a global level consumption is
massively inequitable. Clark (2007) reports that the
wealthiest quintile of the world’s population is responsible
for 86% of total private consumption expenditures and the
poorest quintile just 1.3%. It merits noting that proponents
of the “basic needs” interpretation of sustainable
consumption are also cognizant that large consumption
disparities continue to exist within otherwise affluent
M. J. Cohen
constructed around tons of carbon dioxide, barrels of
oil, barge loads of hazardous wastes, and other similar
metrics. Absent from the discussion thus far has been
the fact that these resources do not simply constitute
material flows; they also give rise to a parallel set of
financial flows in the global macroeconomy.
Consideration of sustainable consumption has focused
primarily on the material dimensions of contemporary
practices. The time has come to recognize that
sustainability—at least sustainability in the real
world—will require a deliberate effort to conceptually
connect the financial and the material elements of the
problem. On one hand, macroeconomists must come
to understand that the materials economy is inherently
depletive and environmentally damaging to the earth
system and, on the other hand, environmental
scientists need to realize that the materials economy is
driven by financial markets.
The following sections then consider whether
prevailing modes of consumption in affluent countries
are likely to be durable and enduring from a
macroeconomic standpoint. Most definitions of
sustainability emphasize the continuation of a
particular pattern of resource use and/or level of
human wellbeing into the indefinite future and this
understanding shapes the following discussion of a
sample of relatively affluent nations. Consideration is
first given to the financial status of households and
then the discussion turns to the international economy.
2. Household Financial Management, Savings,
and Sustainability
Saving by households serves as a critical source
of financial security and provides an important pool of
investment capital. Such accumulation also has the
effect of diverting money away from immediate
consumption and redirecting resources toward
activities that hold the prospect for longer-term
benefit. The following analysis draws on data from
the Organization for Economic Cooperation and
Development (OECD) and focuses in particular on
saving behavior in 17 member countries2 More than
half of these nations (the so-called Anglo-Saxon
group plus Denmark, Finland, Japan, Korea, and the
Netherlands) had declining household savings rates
during the period 1990-2005 (Table 1). Savings for
several of these countries have in recent years actually
dropped into negative territory, a trend that suggests
that consumers are depleting previously accumulated
funds to sustain current levels of consumption.[12] In
2 Data on household savings for the remaining OECD
member countries were not available in comparable form.
Current OECD membership consists of thirty countries:
Australia, Austria, Belgium, Canada, Czech Republic,
Denmark, Finland, France, Germany, Greece, Hungary,
Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico,
Netherlands, New Zealand, Norway, Poland, Portugal,
Slovak Republic, Spain, Sweden, Switzerland, Turkey,
United Kingdom, and United States.
contrast, the German- and French- speaking OECD
countries have continued to maintain comparatively
stable savings rates over this fifteen year period, while
Norwegians and Swedes evince a generally increasing
propensity to save.3
Table 1. Household Net Savings Rate, 1990-2005.
(Percentage of Disposable Household Income).
1990 1995 2000 2005
Australia 6.6 6.7 2.4 -3.7*
Canada 13.3 9.4 4.8 1.2
Denmark 2.0 1.3 -2.0 1.1*
Finland 1.8 3.9 -0.1 -0.1
Japan -- -- 8.5 3.2
Korea 22.5 17.5 10.7 4.4
Netherlands -- 15.7 7.5 7.1
Kingdom 4.2 6.7 0.5 -0.1
United States 7.2 5.1 2.4 -0.4
Austria -- 11.0 8.5 9.1*
Belgium 14.2 15.7 9.7 10.4**
France 9.3 12.7 11.8 11.5
Germany -- 11.1 9.3 10.7
Switzerland 10.8 12.9 13.2 9.1
Norway 2.2 4.6 5.2 10.1**
Sweden -- 9.1 3.2 8.7*
Source: Organization for Economic Cooperation and
Development (available at:
* Data is for 2004;
**Data is for 2003.
Economists have been at the forefront of efforts
to explain why savings rates have trended downward
in affluent countries over the past two decades.[13]
First, economic theory has long maintained that
household saving is influenced by a “wealth effect”
which suggests that as people raise their net worth
they will increase their rate of consumption. In the
context of the past decade, this means that escalating
real estate and stock market values have been
3 Closer examination of annual data reveals that household
savings in Norway has tended to vary with oil prices (i.e.,
savings have declined when oil prices are relatively low)
and the pattern in Sweden has been one where a relatively
high savings rate (approximately 10 percent) fell during the
late 1990s and has recently returned to prior levels.
Money Makes the World Go Round! The Macroeconomics of (Un)sustainable Consumption
responsible for the recent decline in the incidence of
households to save. Careful parsing of the data,
however, indicates that the periods of greatest
consumption growth have not coincided with the most
robust phases of stock-market appreciation.
Second, a related hypothesis suggests that the
savings rate decline has been driven by improvements
in labor productivity and these gains have prompted
households to revise upward their expectations of
future income. While provocative, empirical analysis
seems to suggest that labor productivity accounts for a
relatively small portion of the change in savings.
Third, the last decade has seen the introduction
of numerous financial innovations that have made it
easier for consumers to tap into ample supplies of
credit.[14] The rise of the credit-card economy, as
well as the advent of new instruments with which to
draw on unrealized capital gains, has contributed to
sweeping changes in credit markets.[15] This
explanation appears to hold up well to careful scrutiny
and there are some indications that savings have
declined most sharply in countries with more liberal
access to personal credit.[16]
Fourth, economists have attributed the drop in
the household savings rate to the success of
government transfer programs in reducing financial
insecurity and the need for “precautionary savings.”
The claim is that in earlier eras consumers were
forced to rely exclusively on familial resources to
fund retirement, disability, and major medical
expenses, but this is no longer the case.4 However,
this explanation does not seem especially robust in a
cross-national comparative context because it is
precisely the countries with the most expansive social
welfare systems that have the highest household
savings rates.5
Fifth, demographics, not surprisingly, are
understood to influence savings rates. Populations
with younger age profiles are presumed to be more
prone to save and as people reach retirement age they
begin to draw down their accumulated savings. The
fact that most OECD countries are getting older
prompts one to anticipate that overall savings would
be entering a period of general decline. Empirical
evidence indicates that this aging effect does explain a
significant share of the downturn in Japan, but the
evidence is less clear for other countries. Part of the
more general inadequacy of this explanation stems
4 Extensions of the basic argument contend that effective
fiscal policy and relatively stable economic conditions have
the effect of increasing public confidence and lowering
5 It must be noted that some of this disparity may be
attributable to variability in how savings rates are reported
and subsequently adjusted in different countries, though
considerable progress has been made in recent years to
harmonize national accounts. Comparative analysis,
however, is also complicated by the fact that countries differ
in the way pensions are funded and programs are designed
to provide insurance against illness and unemployment.
These sources of variation affect actual savings rates (and
contribute to data complications) across countries.
from the fact that the drop in household savings has
been much more rapid than one would expect on the
basis of a gradual process of aging.
Sixth, economists have long debated the theory
of Ricardian equivalence (named after the nineteenth
century British economist, David Ricardo, but
ultimately rejected by him) that suggests the public is
indifferent to whether governments fund their
activities through tax increases or debt. It is, from a
taxpayer’s perspective, simply a question of “paying
now or paying later.” The claim is that expectations of
declining government deficits would encourage
people to save less (because taxes will be lower). In
contrast, larger budget deficits would prompt a higher
propensity to save because of expectations of future
taxes to pay down the debt. As discussed in the next
section, several OECD countries have been
simultaneously experiencing growing government
deficits and declining savings rates.
Finally, some economists have drawn attention
to the shift away (largely in the United States) from
the issuance of dividends to stockholders to the use of
stock repurchase plans and have argued that this trend
has reduced savings rates because dividends are
included in the calculation while share repurchases
are not. Federal Reserve economists Massimo
Guidolin and Elizabeth La Jenunesse, however,
emphasize that this explanation is not credible
because the advent of the switchover has been
relatively recent and the downturn in the household
savings rate predates the preference for stock
repurchases over dividend disbursements.[17]
Moreover, only fifty percent of the American public
holds stock and the savings decline has not been
confined to this relatively elite portion of the
Economists, of course, have not been the only
scholars that have sought to identify the reasons for
the demise of household savings in a large number of
affluent countries. Other social scientists have also
looked at the problem and have done so by
supplementing their analyses by engaging with the
lived experiences of actual consumers. The most
prominent figures working from this perspective have
been Juliet Schor and Elizabeth Warren who have
studied consumption and the use of credit in the
United States.[18]
Schor begins her investigation with the labor
market and the growth of women in paid employment
over the last few decades. This trend has occurred in a
context of increasing workplace stratification that now
brings people with vastly different earning capacities
into close social proximity. In earlier eras, when the
assembly line was the paradigmatic mode of
economic organization, there was little integration
across income classes and people took their
consumption cues from peers earning roughly the
same amount of money (hence the famous aphorism
about “keeping up with the Jonses”). The
heterogeneity of contemporary workplaces
encourages individuals of modest earning capacity to
emulate the purchasing practices of their more
M. J. Cohen
affluent colleagues and this phenomenon leads to a
constant ratcheting up of consumption standards. The
pervasiveness of television has intensified this process
by showcasing consumer goods—both in commercial
advertisements and actual programming—that exceed
the affordability of most viewers. As a result,
consumption aspirations spiral upward as socially
accepted notions of what constitutes an appropriate
level of comfort and convenience are continuously
upgraded.[19] The pressure to participate in these
modes of competitive consumption has the inevitable
consequence of forcing consumers to draw down
savings and incur outsized amounts of debt.
Elizabeth Warren takes a different point of
departure, one focused on the rising tide of
bankruptcy in the United States and the budgetary
challenges of maintaining a contemporary household.
She notes a curious paradox, namely that the growing
number of women in the paid labor force has tended
to increase rather than to decrease financial stress.
The addition of a second paycheck has added to
income, but the supplementary money has induced
new expenditures. At the same time, when women
began to take up paid employment, their households
inadvertently lost an important source of prior
flexibility. In past times, non-working mothers could
seek temporary employment in the event of a financial
emergency and serve as a source of new income.
Warren summarizes this unfortunate irony in the
following terms.
At a time when women are getting college
diplomas and entering the workforce in record
numbers, their families are in more financial trouble
than ever…They saw the rewards a working mother
could bring, without seeing the risks associated with
the newfound income. And partly they were the
victims of one another. As millions of mothers poured
into the workplace, it became increasingly difficult to
put together a middle-class life on a single
Warren identifies five tightly interlinked factors
as responsible for putting households in a financial
straightjacket and contributing to the demise of
savings and the rising tide of American indebtedness:
the quest for decent schools, the necessity of owning
and maintaining a second car, the expenses incurred
for childcare, the cost of medical care, and the need to
finance increasingly unaffordable higher education.
This array of expenditures has tipped middle-class
households into what is described as the “two-income
So we have here two quite different sociological
explanations for the declining savings rate in the
United States.6 On one hand, Schor contends that the
failure to save is the result of a “new consumerism”
6 A curious feature of this discussion on the decline of
savings (and the associated accumulation of debt) is the
absence of credentialed sociological voices. Juliet Schor is
actually a trained economist and Elizabeth Warren is a
driven by an unyielding desire for status and
positional goods. On the other hand, Warren takes
what might be construed as a more empathetic
perspective and attributes the low savings rate to a
barrage of socioeconomic circumstances that make it
exceedingly difficult for American middle-class
families to catch a break.
The discrepancy in these two views resides in
the fragmentation of the American middle class and
the imprecision that often accompanies discussions of
the life circumstances of these households. The
bifurcation of the middle-class along income lines has
received considerable attention over the past
decade.[21] Schor though is quite explicit in
explaining that she is primarily concerned with
“middle-class and upper-middle-class consumers.”
She goes on to further explain,
[S]pending patterns are strongly differentiated
by class, and the system of competitive spending I
describe is driven by those with discretionary
income…I focus on more affluent consumers not
because I believe that inequalities of consuming
power are unimportant. Far from it. They are the heart
of the problem. But I believe that achieving an
equitable standard of living for all Americans will
require that those of us with comfortable material
lives transform our relationship to spending (p. xiv-
Warren, however, does not offer any
qualification of the specific segment of the
contemporary American middle class on which her
analysis focuses. One though gets a strong sense that
it is not the same middle class that animates Schor’s
discussion of lawyers, accountants, and other
professionals with discretionary income. The
evocative personal profiles that Warren intersperses
throughout her account are based on the experiences
of police officers, school teachers, and dental
hygienists—consumers that face a decidedly different
set of challenges than their more affluent counterparts.
3. International Dimensions of Fiscal
Economist Paul Krugman observes that “[t]he
basic rule of fiscal responsibility for a national
government is pretty much the same as the rule for a
family. Pay off your debts and build up financial
reserves when things are good, so that you can draw
on those reserves later.”[22] As discussed above, the
savings rate is an important measure of how
households in OECD countries are meeting this test. It
is though possible, as Krugman suggests, to approach
questions regarding the sustainability of contemporary
consumption from the standpoint of international
economics. Two appropriate indicators for assessing a
country’s performance in this regard are its
government budget balance (balance between
revenues and expenditures) and its current account
balance (trade balance plus net factor income flows of
dividends and interest to/from recipients abroad, and
net transfer payments).
Money Makes the World Go Round! The Macroeconomics of (Un)sustainable Consumption
First, it is common practice for governments to
borrow money on both a short- and long-term basis
(generally through the issuance of treasury bonds) to
balance their revenues and expenditures.7 Of the 27
OECD nations for which there are comparable data,
15 (55 percent) reported budget deficits in 2005
(Figure 1).8 The most heavily leveraged countries
relative to their respective gross domestic products
(GDP) were Hungary, Portugal, Japan, Greece, and
Italy with revenue shortfalls all in excess of 4 percent.
Aggregate borrowing to cover these deficits totaled
more than $US1 trillion with the United States
accounting for 45 percent of this amount and Japan a
further 20 percent.9
Budget deficits are the natural outcome of a
situation in which a country expends more money
than it receives. During periods when tax increases or
spending reductions are not politically viable, credit
markets can provide as a useful pressure valve,
particularly when interest rates are relatively low.
Throughout much of history, borrowing has been an
essential way to pay for wars and other exigencies.
The danger of this strategy, however, is when annual
borrowing fails to decline once the emergency is over
or changed market conditions make it impossible to
roll the debt over at reasonable rates of interest.[23]
Second, while a high volume of exchange is
regarded as a key characteristic of the current era of
globalization, the system of international trade tends
to be comprised of countries that are net importers
and others that are net exporters. Of the sample of 27
OECD countries, 15 (55 percent) had trade deficits
(imports exceeded exports) in 2005 (Figure 2). While
Iceland, Portugal, and New Zealand had the largest
shortfalls relative to their respective GDPs, these
amounts were dwarfed in absolute terms by the
massive deficit (US$793 billion or 71 percent of the
total for this group of counties) accrued in 2005 by the
United States.10
7 Most commentators agree that determination of an
appropriate amount of government debt remains an open
question that revolves around the specific circumstances of
the borrowing country and the purposes to which the
borrowed funds are put.
8 The OECD data set does not include Belgium, Mexico,
Turkey, and Slovenia.
9 The nine OECD countries with positive budget balances
had an aggregate surplus of US$129 billion in 2005. The net
budget deficit across the OECD for 2005 then amounted to
US$884 billion. Though comparable data are not available,
this sum surely increased in 2006 as the budget deficit for
the United States alone increased by 33 percent from
US$450 billion to US$600 billion.
10 The United States current account deficit grew still larger
to a record high of US$811 billion in 2006 before declining
in 2007 to US$738 billion. This small improvement was
largely due to the weak dollar and growth in American
An important component of the current accounts
of net oil-importing countries is the prevailing price of
petroleum. When global oil prices increase, the
current accounts of these nations are likely to turn
negative unless they are able to increase their exports
(or pare down other imports) to offset the downward
pressure. Independent of oil prices, a negative current
account balance can simply be the result of relatively
weak export capacity in combination with a hearty
appetite for imports. A sustained current account
deficit will, under normal circumstances, tend to
weaken the value of a country’s currency—a situation
that the United States has faced for more than two
decades. The American current account balance
turned consistently negative in 1982, but because the
dollar serves as the primary international reserve
currency, the country has been to buffer the adverse
effects that would have otherwise been generated by
its chronic trade deficit.
Table 2. OECD Countries with Twin Deficits, 2005
(All figures in billions of current US$)
Country Current
Low Deficit
Slovak Republic 1.5 2.1 3.5
Hungary 2.8 5.1 7.9
Czech Republic 4.6 7.2 11.8
Greece 5.3 14.1 19.4
Portugal 11.1 19.1 30.2
Poland 33.9 19.6 53.6
Medium Deficit
Italy 141.4 51.0 192.4
United Kingdom 124.7 100.9 225.6
France 129.1 123.4 252.4
High Deficit
United States 1,140.6 743.9 1,884.5
Finally, economists employ the notion of a “twin
deficit” to describe the situation of a country that
simultaneously experiences a budget deficit and a
current account deficit.[24] As depicted in Table 2,
ten OECD countries from the sample of 27 nations
(43 percent) are currently running twin deficits.11
France, Italy, Japan, Spain, and the United Kingdom
have modest twin deficits with combined budget and
current account deficits amounting to approximately
5-6 percent of their respective GDPs.12 It is essential
though to put these amounts into perspective by
comparing them to the United States where the total
twin deficit for 2005 was US1.4 trillion.
11 A total of six OECD countries can be construed as having
“twin surpluses” and hence represent on the basis of this
analysis to be cases of fiscally sustainable consumption.
12 In contrast, Canada, Denmark, Finland, Germany, Korea,
Luxembourg, Netherlands, Norway, Sweden, and
Switzerland are “twin surplus” countries.
M. J. Cohen
Percent of GDP
New Zealand
Slovak Republic
United Kingdom
Czech Republic
United States
Fig. 1. Net Government Borrowing/Lending OECD Countries, 2005
Percent of GDP
New Zealand
United Kingdom
Czech Republic
United States
Slovak Republic
Fig. 2. Combined Current Account and Budget Deficit/Surplus OECD Countries, 2005
4. American Exceptionalism and the
Consequences of (Un)sustainable
While the financial condition of several affluent
countries is fiscally problematic, it is the very
considerable deficits that the United States is running
that are of greatest significance from the standpoint of
sustainable consumption. It is true that history
provides plenty of examples of countries that have
amassed large debts (ancient régime France is perhaps
the most famous case), but this financial strategy has
Money Makes the World Go Round! The Macroeconomics of (Un)sustainable Consumption
typically been limited to the selling of bonds during
periods when the existence of the state was under
threat.[25] While one recent estimate places the
incurred cost of American military operations in Iraq
and Afghanistan at more than US$3 trillion, a
significant portion of this amount represents future
expenses and the overall amount must be interpreted
relative to the vast size of the country’s economy.[26]
The point here is that while it is important not to
discount the financial burden of these conflicts, there
is no precedent of a great power relying on debt to
sustain ordinary consumption in the way that the
United States is doing today.
The historian Niall Ferguson is the leading
exponent of the view that the United States has
become vulnerable to “imperial overstretch” as a
result of its debt-ridden financial circumstances.13
While the country’s current account deficit is of long
standing as noted above, a considerable political and
economic achievement of the Clinton administration
was its ability to reverse the prior pattern of budget
deficits and, by the end of its second term, to begin to
accumulate sizeable surpluses. The current Bush
administration, intent on maintaining its policy of tax
cuts even in the face of rising government
expenditures has not only reversed this trend, but has
compounded the magnitude of the problem by
championing serial tax cuts for the wealthiest
American consumers.
Moreover, the current situation, as other
commentators have rightly noted, is only the tip of the
iceberg. The American treasury has yet to feel the
crashing wave of claims that will come about as the
generation of approximately 77 million “baby
boomers” becomes eligible for health insurance
through the government’s Medicare program.14
According to estimates produced by government
economists, these implicit liabilities amount to a
staggering US$37 trillion. As Ferguson observes
[T]his overstretch has almost nothing to do with
the United States’ overseas military commitments. It
is the result of America’s chronically unbalanced
domestic finances. And the magnitude of the problem
is such that most Americans, including those who
consider themselves well informed about the nation’s
finances, find it quite simply incredible. Indeed, the
main reason why America’s fiscal crisis remains
13 Ferguson appropriately contends that American military
expenditure is not the root of the current consumption
problem. He observes that spending on the armed forces in
the United States reached a peak of 14.2 percent of GDP
during the early 1950s, but today is a relatively modest 3.0
percent. The actual current percentage, however, is likely to
be somewhat higher because of the irregular strategies used
to account for the costs of the wars in Iraq and Afghanistan.
14 The United States is, of course, not the only country in
this situation, but the travails of the American political
system have exacerbated the problem by implementing
generous tax cuts instead of shoring up its future financial
latent is precisely that people refuse to believe in its
existence (italics in original).[27]
The United States has been able to maintain its
characteristically high levels of aggregate
consumption in the face of mountainous debt by
borrowing large sums of money from China and other
East Asian countries. While the current situation risks
for both the United States and its lenders, in virtually
all debtor-creditor relationships it is the creditor that
holds the upper hand. For example, if China decided
to diversify its current portfolio (or even to slow down
its rate of purchasing American debt) the People’s
Bank of China would suffer significant financial
losses as its remaining holdings fell in value. The
consequences of such action for the United States—
and by extension the rest of the world—would be
economically catastrophic as American interest rates
spiked upward to attract new money to replace the
withdrawn Chinese funds. Equally dangerous from
the standpoint of United States foreign policy is the
fact that the mere threat of curtailing its investment in
American treasury bonds gives China a unique degree
of leverage.
The scope of the problem is by no means limited
to the United States and China. A curtailed
commitment by the Chinese to continue to maintain
their current level of debt purchases means that other
countries would be pressured to fill the gap to prevent
the global economy from spiraling into a perilous
tailspin. Because of the magnitude of the amounts
involved it is not clear that other central banks would
have the capacity to step into the breach even if they
could be convinced to do so. The quandary is thus that
the United States is consuming at a voracious pace,
well beyond a level that the country is able to
maintain without support from the rest of the world.
Because the United States is the fulcrum of the global
economy—the key export market for excess
production and the sponge for residual investment
funds—the only ways to engineer a correction would
seem to be for the Federal Reserve to expand the
money supply and to inflate away the country’s debt.
Among prominent economists a consensus
appears to be developing that a tipping point may not
be too far into the future and a sampling of the views
of these normally stolid commentators is potentially
instructive. The economist and political commentator
Paul Krugman contends that
One of these years, and probably sooner than
you think, the financial markets will look at the
situation, and realize that the U.S. government has
made inconsistent promises—promises of benefits to
future retirees, repayment to those who buy its debt,
and tax rates far below what is necessary to pay for all
of it. Something will have to give, and it won’t be
pretty. In fact, I think the United States is setting itself
up for a Latin American-style financial crisis, in
which fears that the government will try to resolve its
dilemma by inflating away its debt cause interest rates
to soar.[28]
M. J. Cohen
Harvard economist Gregory Mankiw has
similarly written that
As anyone who has looked at the numbers
knows, the federal government’s current budget
deficit is, in a sense, only the tip of the fiscal
problems to come. The federal budget is on an
unsustainable path. When the baby-boom generation
retires and becomes eligible for Social Security and
Medicare, all hell is going to break loose. The policy
options are not pretty—either large cuts in promised
benefits or taxes vastly higher than anything ever
experienced in U. S. history.[29]
Even former American Treasury Secretary
Robert Rubin, a figure by no means inclined to
hyperbole, has stated the federal budget is “on an
unsustainable path” and that the “scale of the nation’s
projected budgetary imbalance is now so large that the
risk of severe adverse consequences must be taken
very seriously, although it is impossible to predict
when such consequences may occur.”[30] Rubin’s
immediate successor at Treasury, Lawrence Summers,
has argued similarly that
America’s spending addiction now threatens to
undermine [the] virtuous global economic cycle. The
country that is more economically central than it has
been in decades is borrowing more than any other
country in the world. In many respects, the world
economy is dependent on an American engine that is
running on fumes. Unless it is brought under control,
the U.S. savings crisis will soon be the world’s
In addition, the International Monetary Fund
dourly reported in 2004 (when the deficits were only a
fraction of what they are today),
U.S. government finances have experienced a
remarkable turnaround in recent years. Within only a
few years, hard-won gains of the previous decade
have been lost and, instead of budget surpluses,
deficits are again projected as far as the eye can see.
The deterioration has not been restricted to the federal
budget but has also taken place at the state and local
government levels. As a result, the U.S. general
government deficit is now among the highest in the
industrialized world.[32]
Despite the parlousness of these observations a
clear determination about whether the prevailing
American fiscal situation is “sustainable” cannot be
made from the relatively narrow standpoint of
macroeconomics. Indeed, Helen Thompson recently
noted, “Few dispute that low savings and a current
account deficit of [the present] magnitude is
unsustainable, but economists disagree about what
would be a sustainable level and what the
consequences of the deficit are.”[33] Answers to such
matters ultimately reside within the realm of
international political economy and the balance of
power between nations. American consumers have
been able to maintain their preferred lifestyles
because of the willingness of foreign central banks to
underwrite—at least for the time being—the costs of
their consumption. However, if autonomy is
understood to be an important element of
sustainability—as indeed the literature on sustainable
development suggests it is[34]—it is evident that the
United States now finds itself in a potentially perilous
dependency relationship with a country that is both its
primary creditor and major geopolitical rival. It is not
difficult to envision a situation where the ability of the
United States to act in its own foreign policy interests
is compromised by its need to pay for prior
consumption. Several commentators have noted that
the flashpoint could very well be over Taiwan. The
United States’ inclination to protect Taiwan could
very conceivably be constrained by Chinese threats to
divest some of its American treasury bonds.[35] Such
a situation would be by no means unprecedented. The
United States itself used the threat of a monetary
crisis to force Britain (which was acting at the time in
collaboration with France and Israel) to abandon its
1956 campaign to retake control of the Suez Canal
after it was nationalized by Egypt.[36] A standoff
with Iran could also serve as another possible moment
of reckoning. China and Iran have long enjoyed a
successful commercial relationship over the last
several decades and the Chinese have provided the
Iranians with military equipment and supported
Tehran’s controversial nuclear program. At present,
20 percent of Chinese oil supplies come from
Iran.[37] The long simmering conflict with North
Korea over its regional political ambitions could
provide a third trigger.
The highly plausible showdowns highlighted by
these examples may not be the limit of currently
unsustainable American consumption and more
disconcerting futures may be on the horizon if the
United States does not address its structural deficits.
For the past two decades, scholars have debated the
evolving status of the country’s hegemonic position in
global affairs. Questions concerning whether the
United States was at risk of “imperial overreach” were
first raised seriously by the historian Paul Kennedy
back in 1987.[38] This debate quieted down during
the 1990s only to reappear once again after 2002 as
the United States again found itself mired in
protracted military conflicts and accumulated
We are currently moving through uncharted and
treacherous waters. There are few historical examples
of “debtor empires” and the United States has without
question sacrificed a measure of its future sovereignty
to enjoy the fruits of current consumption.[40] This
determination lifts the discussion of sustainable
consumption beyond of the frame of science, and also
beyond the frame of macroeconomics. It is, moreover,
neither a uniquely American dilemma nor even a
Sino-American problem as some commentators have
alleged. In various ways, the full range of the
Money Makes the World Go Round! The Macroeconomics of (Un)sustainable Consumption
country’s trading partners and creditors have enabled
consumers in the United States to perpetuate a
situation that is likely to have profoundly unsettling
international consequences. Numerous parties share
responsibility for the current situation and it will take
a collective effort, and probably a good deal of belt
tightening, to reverse the prevailing pattern.
5. Conclusion
Policy makers have typically treated the adverse
effects of an international economy built around the
rapid obsolesce of consumer goods and the largely
unrestrained throughput of energy and materials as
incidental problems. The foregoing discussion,
however, makes apparent that prevailing concerns
about the sustainability of current consumption
practices transcend this customary understanding and
extend beyond the realm of environmental politics.
Consumption flows are at the heart of the
contemporary geopolitical map with the United States
serving as the market of first and last resort for much
of the rest of the world. Viewed in such terms,
sustainable consumption is foremost a
macroeconomic challenge.
When sustainable consumption is framed in
terms of macroeconomics, we move beyond the
purchase of organic vegetables, hybrid cars, and fair-
trade coffee. A new set of strategies begins to take
shape and sustainable consumption is lifted out of the
peripheral realm of low politics that it has occupied
for the past two decades. Opportunities begin to
emerge to enlist new institutional allies that have their
own legitimate concerns about the efficacy of
contemporary consumption practices and to link up
with core issues on the uppermost reaches of the
contemporary policy agenda.15 It is, for instance, not
difficult to envision sustainable consumption
capturing the interest of the World Bank, the
International Monetary Fund, and the World Trade
Organization once the macroeconomic dimensions are
placed in bold relief.
On the basis of the foregoing analysis, the
consumption practices of at least ten OECD countries
can be described as unsustainable though several of
these nations have small economies and relatively
modest connections to the international system. In
contrast, France, Italy, and the United Kingdom are
currently “living beyond their means” with more
15 To be sure, some economic policy makers actively
encourage immoderate consumption under the supposition
that unrestrained consumerism plays an important role in
maintaining economic wellbeing. The expression of such
views was common in the United States during the
aftermath of the 9/11 terrorist attacks and have again
become apparent as the United States slides into recession.
This political emphasis on consumption should not be
surprising given that consumer expenditures now account
for 70 percent of total economic activity in the country (up
from 60 percent in the 1950s).
serious domestic and international implications.16 The
United States, by virtually any measure, is a case of
extreme unsustainability. The country’s very heavily
leveraged status is not only a matter of national
political and economic significance. Because
American consumers account for such a
disproportionate share of global production, efforts to
wind down current levels of consumption will
invariably ripple outward to the rest of the world.
Finally, the challenge of approaching sustainable
consumption from a macroeconomic perspective is, of
course, not solely a matter of encouraging a greater
propensity to save. Accumulated capital will not sit
silently under mattresses or in bank vaults for
indefinite periods of time. In the absence of
appropriate investment incentives, these resources
will seek customary opportunities and generate
unfortunate rebound effects that will undermine any
improvements realized as a result of an initial
dampening down of immediate consumption. This is a
nontrivial problem, a dilemma in the classical sense of
the term, and it speaks to the enormous complications
embodied in any policy initiative to promote
sustainable consumption.
1. Daniel Miller (ed.) Acknowledging Consumption: A
Review of New Studies (London: Routledge, 1995).
2. John Manoochehri, ‘Post-Río “sustainable
consumption”: establishing coherence and a common
platform,’ Development 45:3, 2002, pp. 47-53.
3. United Nations Department of Economic and Social
Affairs, Agenda 21: The Río Declaration on
Environment and Development (New York: United
Nations, 1992).
4. See, for example, Organization for Economic
Cooperation and Development, Sustainable
Consumption and Production: Clarifying the
Concepts (Paris: OECD, 1997).
5. Scientific reports included Royal Society of London
and the United States National Academies of Science,
Towards Sustainable Consumption (London: The
Royal Society, 1997) and Paul Stern, Tom Dietz,
Vernon Ruttan, Robert Socolow, and James Sweeney
(eds.) Environmentally Significant Consumption:
Research Directions (Washington, DC: National
Academies Press, 1997). For early studies of
sustainable consumption, see Michael Redclift,
Wasted: Counting the Costs of Global Consumption
16 Former UK Environment Secretary David Miliband
(current Foreign Secretary) is one of a small handful of
prominent political figures who recognizes the true scale of
the incompatibility between contemporary consumption
practices and ambitious targets to reduce greenhouse gas
emissions. In 2006, Miliband proposed that the government
give active consideration to rationing rights to emit carbon
dioxide. See David Miliband, ‘The Great Stink: Towards an
Environmental Contract,’ Audit Commission Annual
Lecture, 19 July 2006,
-miliband/dm060719.htm. See also Michael Meacher, ‘I
would turn the lights out,’ The Ecologist 37(1), 2007, pp.
M. J. Cohen
(London: Earthscan, 1996); Maurie Cohen and Joseph
Murphy (eds.) Exploring Sustainable Consumption:
Environmental Policy and the Social Sciences
(Oxford: Elsevier, 2001); and Thomas Princen,
Michael Maniates, and Ken Conca (eds.) Confronting
Consumption (Cambridge: MIT Press, 2002).
6. Garrette Clark, ‘Evolution of the global sustainable
consumption and production policy and the United
Nations Environment Programme’s (UNEP)
supporting activities,’ Journal of Cleaner Production
15:6, 2007, pp. 492-498 and Jeffery Barber,
‘Production, consumption, and the World Summit on
sustainable development,’ Environment, Development,
and Sustainability 5:1-2, 2003, pp. 63-93.
7. Recent reports include, United Nations Environment
Program, Sustainable Consumption Opportunities
(Geneva: UNEP, 2001); UK Department of
Environment, Food, and Rural Affairs, Changing
Patterns: UK Government Framework for Sustainable
Consumption and Production (London: DEFRA,
2005); UK Sustainable Consumption Roundtable, I
Will If You Will (London: UK Sustainable
Development Commission and National Consumer
Council, 2006); Finnish Ministry of the Environment,
Getting More for Less (Helsinki: Environment
Ministry, 2005); and European Environment Agency,
Household Consumption and the Environment
(Copenhagen: EEA, 2005).
8. Magnus Böstrom and Mikael Klintman, Eco-
standards, Product Labelling, and Green
Consumerism (Basingstoke: Palgrave Macmillan ,
9. Thomas Princen, The Logic of Sufficiency
(Cambridge: MIT Press, 2005).
10. Boelie Elzen, Frank Geels, and Ken Green (eds.)
System Innovation and the Transition to Sustainability
(Cheltenham: Edward Elgar, 2004).
11. See, for example, Norman Myers, ‘Sustainable
consumption’ Science 287:5462, 2000, pp. 2419;
Kenneth Arrow, Partha Dasgupta, Lawrence Goulder,
Gretchen Daily, Paul Ehrlich, Geoffrey Heal, Simon
Levin, Karl-Gören Mäler, Stephen Schneider, David
Starrett, and Brian Walker, ‘Are we consuming too
much?’ Journal of Economic Perspectives 18:3, 2004,
pp. 147-172; Paul Ehrlich and Lawrence Goulder, ‘Is
current consumption excessive? A general framework
and some indications for the United States’
Conservation Biology 21(5), 2007, pp. 1145-1154;
and Herman Daly, Brian Czech, David Trauger,
William Rees, Mansi Grover, Tracy Dobson, and
Stephen Trombulak, ‘Are we consuming too much—
for what?’ Conservation Biology 21:5, 2007, pp.
12. Most of the commentary on this situation has focused
on the United States. After four decades of relatively
robust savings following World War II, during which
the country’s household savings rate fluctuated around
10 percent, the pattern shifted during the mid-1980s. It
turned negative in April 2005 for the first time since
1933. For a historical review of savings in the United
States, see David Tukker, The Decline of Thrift in
America: Our Cultural Shift from Saving to Spending
(New York: Praeger, 1991).
13. For a useful summary, see Massimo Guidolin and
Elizabeth La Jeunesse, ‘The decline in the U.S.
personal saving rate: is it real and is it a puzzle?’
Federal Reserve Bank of St. Louis Review,
November/December (2007).
14. See also Robert Manning, Credit Card Nation: The
Consequences of American’s Addiction to Credit
(New York: Basic Books, 2001).
15. Maurie Cohen, ‘Consumer credit, household financial
management, and sustainable consumption.’
International Journal of Consumer Studies 31:1, pp.
57-65 (2006).
16. Jonathan Parker, ‘Spendthrift in America? On two
decades of decline in the U.S. saving rate’ NBER
Macroeconomics Annual 14(1):305-370 (1999).
17. Guidolin and La Jeunesse, op cit.
18. Juliet Schor, The Overspent American: Why We Want
What We Don’t Need (New York: Basic Books, 1996)
and Elizabeth Warren and Amelia Warren Tyagi, The
Two Income Trap: Why Middle-Class Mothers and
Fathers are Going Broke (New York: Basic Books,
19. Robert Frank, Luxury Fever: Money and Happiness in
an Era of Excess (Princeton, NJ: Princeton University
Press, 1999) and Elizabeth Shove, Comfort,
Cleanliness, and Convenience: The Social
Organization of Normality (Oxford: Berg, 2004).
20. Warren and Tyagi, op cit., pp. 10.
21. See, for example, Katherine Newman, Falling from
Grace: Downward Mobility in an Age of Affluence
(Berkeley: University of California Press, 1999).
22. Paul Krugman, The Great Unravelling (New York:
W. W. Norton, 2003).
23. Niall Ferguson, The Cash Nexus: Money and Power
in the Modern World, 1700-2000 (London: Penguin,
24. Menzie Chin, Getting Serious about the Twin Deficits
(Washington, DC: Council on Foreign Relations,
2005); Jeffrey Frankel, ‘Could the twin deficits
jeopardize US hegemony?’ Journal of Policy
Modeling 28(6), pp. 653-663 (2006).
25. Ferguson, The Cash Nexus, op cit.
26. See Joseph Stiglitz and Linda Bilmes, The Three
Trillion Dollar War: The True Cost of the Iraq
Conflict (New York: W. W. Norton, 2008). It merits
recognizing that the Bush administration has
employed a variety of unconventional accounting
measures to fund the wars in Iraq and Afghanistan and
the actual cost has become a matter of perplexing
confusion and heated political debate. A separate
confounding factor relates to how to apportion future
costs of caring for injured soldiers and other related
expenses that will stretch out for the next several
27. Niall Ferguson, Colossus: The Rise and Fall of the
American Empire (London: Penguin, 2005), pp. 262.
See also Niall Ferguson and Laurence Kotlikoff,
‘Going critical: American power and the
consequences of fiscal overstretch,’ The National
Interest, Fall, 2003, pp. 22-32.
28. Paul Krugman, 2003, pp. 136.
29. Gregory Mankiw, ‘Reflections on the trade deficit and
fiscal policy,’ Journal of Policy Modeling 28(6), pp.
679-682 (2006).
30. Elizabeth Becker and Edmund Andrews, ‘IMF calls
U.S. debt a worldwide peril’ The International Herald
Tribune, 9 January, 2004, pp. 1.
31. Lawrence Summers, ‘American overdrawn,’ Foreign
Policy 143 (July/August): 46-49 (2004).
32. Mühleisen, M. and C. Towe (eds.), U.S. Fiscal
Policies and Priorities for Long-Run Sustainability
(Washington, DC: International Monetary Fund,
Money Makes the World Go Round! The Macroeconomics of (Un)sustainable Consumption
33. Helen Thompson, ‘Debt and power: the United States’
debt in historical perspective. International Relations
21(3), 2007, pp. 305-323.
34. See, for example, Robin Eckersley, ‘From the liberal
to the green democratic state: upholding autonomy
and sustainability’ International Journal of Innovation
and Sustainable Development 1(4), 2006, pp. 266-
35. Sherle Schwenninger, ‘America’s Suez Moment’ The
Atlantic Monthly 293(1), 2004, pp. 129-130.
36. Iwan Morgan, ‘The indebted empire: America’s
current-account deficit problem. International Politics
45(1), 2008, pp. 92-112.
37. Thompson, pp. 320. See also Parag Khanna, ‘Waving
goodbye to hegemony’ The New York Times
Magazine, 27 January 2008.
38. Paul Kennedy, The Rise and Fall of Great Nations
(New York: Random House, 1987).
39. Jackson, I. 2007. The geopolitics of President George
W. Bush’s foreign economic policy. International
Politics 44(5):572-595.
40. Ferguson, Colossus, op cit.
Prof. Maurie J. Cohen – Reader with the
Sustainability Research Institute at the University of
Leeds (UK) and associate professor with the
Environmental Policy Studies Program at the New
Jersey Institute of Technology (USA).
Address: University of Leeds,
Leeds LS29JT, United Kingdom
Pinigai priverčia Pasaulį suktis!
(Ne)darnaus vartojimo makroekonomika
Maurie J. Cohen
Darnumo mokslinių tyrimų institutas, Žemės ir aplinkos apsaugos mokykla, Lydos universitetas
(gautas 2008 m. birželio mėn.; atiduotas spaudai 2008 m. rugsėjo mėn.)
Nuo 2002 m. vykusio Johanesburgo susitikimo darnaus vartojimo problema užima vis
svarbesnę vietą pasaulio aplinkos apsaugos politikoje. Jungtinių Tautų Aplinkos apsaugos
programa buvo svarbi platinant šią idėją svarbia iniciatyva, dar kitaip vadinama Marakešo procesu.
Dėl to kilo nemažai konfliktų tarp tų pusių, kurios turėtų pakeisti esamus vartojimo įpročius, ir tų,
kurios atsakingos už tokių pokyčių įgyvendinimą. Kiek kitokia nesutarimų priežastis kilo
stengiantis apibrėžti darnaus vartojimo lygius pagal ekologijos veiksnius. Šiame straipsnyje
siekiama „darnaus vartojimo“ sąvokai suteikti praktiškesnės, makroekonominės išraiškos. Dėka
tokios išraiškos , atsiranda galimybė suvienyti darnaus vartojimo šalininkus ir ekonomistus, kurie
vertina perdėtą vartojimą įprastinėmis priemonėmis: namų ūkio santaupų mažėjimu, didelio
valstybės biudžeto deficito kaupimusi ir neigiamo prekybos balanso augimu. Nedarniai
vartojančios valstybės nustatomos remiantis Ekonominio bendradarbiavimo ir plėtros
organizacijos duomenimis. Jungtinės Amerikos Valstijos laikomos išskirtiniu atveju, kai valstybė
gyvena gerokai peržengdama savo išteklių galimybes. Tokia situacija gali būti geras pavyzdys
galimoms likusio pasaulio pasekmėms nustatyti.
ResearchGate has not been able to resolve any citations for this publication.
Full-text available
You may recognize the name Elizabeth Warren. A Harvard law professor, she is one of the co-authors of As We Forgive Our Debtors and The Fragile Middle Class. The co-author of this book is her daughter, Amelia Warren Tyagi, a business consultant. Together they bring an interesting perspective to the financial reality faced by many families today. They point out that bankruptcy is becoming increasingly common. The authors argue that bankruptcy is not the result of deadbeats and extravagant spenders as is argued by many of the proponents for change in the bankruptcy laws. Increasingly fragile middle-class families living too close to the edge without any safety net are causing the increase in bankruptcy numbers in today's society. The most common attributes of persons filing for bankruptcy today are a lost job, a serious medical problem, and divorce. Almost 90 percent of the new bankruptcy filings, according to the authors, follow one of these three life events. Another point raised by Warren and Tyagi is the cost of children. At one time, children were considered assets to a family, but that is no longer true. Children are expensive and the benefits that parents enjoy from children today are strictly non-financial. The authors go so far as to say that having a child is the best predictor that a woman will end in financial collapse. Many middle-class families believed that sending the second parent into the labor market would make life easier, at least financially. It is true that women have opportunities and incomes that were unheard of just a generation ago. But even with that, having two earners in the family appears to have lessened the family's ability to withstand financial disaster because these two-income families have given up the backup provision of having a parent at home who could tend to aged parents, take care of children outside of school, and enter the labor market in times of disaster, such as job loss or disability.
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John Manoochehri raises concerns about over-consumption of resources and analysis of changing consumer behaviour at the heart of the current international debate on sustainable consumption. He proposes that the terms of the debate were set by Agenda 21 and the concerns of sustainable development. He explores both the conceptual coherence of sustainable consumption and its relationship with sustainable development as a way to explain the lack of action on consumption since Rio.Development (2002) 45, 47–53. doi:10.1057/palgrave.development.1110378
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