Families choose expenses amid economic uncertainty

Posted August 19, 2011

N.C. State football tickets are the luxury of choice for one Raleigh family living on an otherwise tight budget.

With news of unemployment over 10 percent, a weak housing market and global debt issues, even those who can afford to spend are looking at every expense. And that slowdown means the United States is only slowly recovering from the recession.

Harry Davis, and economist with the NC Bankers Association, said the usual pattern has failed to play out.

Economic growth is spurred by consumer spending, but if consumers save, the economic recovery stalls. "Debt levels were at historic highs, so consumers are trying to get out of debt, so they've actually cut spending," Davis said.

Usual sources of economic growth fail Usual sources of economic growth fail

The Federal Reserve could reduce interest rates to encourage consumers to take on more debt like car and home loans, but with rates already at record lows, there is little wiggle room there.  

The federal government can't afford to spend either, Davis said, pointing to the recent debt-ceiling debate in Congress. 

"It's sort of three legs of that stool that lead to the bounce," Davis said. "All three legs are in trouble."

For Steve Lane, a small business owner in Raleigh, that means spending on the necessities, but watching the bottom line. 

"My wife and I, we don't go out to eat as often," he said. We don't buy clothes as often. (We) go to no movies."

Lane said, while he has cut back spending by about 40 percent over the past couple of years, there is one tradition he won't give up. "We have to go to N.C. state football games. We save for that. That's our luxury item – season tickets for the Wolfpack."


This story is closed for comments.

Oldest First
View all
  • WritNEWlaws Aug 22, 2011

    @So Mr. Steve Lane, instead of spending money on a new shirt, nice meal or an action pack movie, you waste money instead on NC State football tickets. At least you wouldn't be disappointed at a movie

    So funny!! I totally agree!

  • The Fox Aug 19, 2011

    [Our last recession was back in the early 80's under Regan's leadership] Aaahhh, I was there and working then. It definately started in the 70's with the disaster named Carter and the days of double didgit inflation.

  • larieke Aug 19, 2011

    Sorry cut off. ...until they say, WHAT HAPPENED!

  • autismawareness Aug 19, 2011

    luxury? sounds like punishment to me.

  • Worland Aug 19, 2011

    Reagan inherited an massive recession from Carter. Through LEADERSHIP, tax cuts and pro-business agenda... we can out of the recession in great shape.

    GW inherited a recession of Clinton. Between the stock market crash of 1998, dot com bust and an Impeached President... GW had quite a hill to climb. Considering 9/11 shut down the western world for months, and Katrina devastating the south, it's amazing the country was still doing well (gov't revenue was growing at an unprecidented 7% a year) until the Dems won total control of Congress in 2006/07.

    Obama inherited a bloated gov't and recession he helped to create while in the Senate. The last deficit under GOP control of DC was $160B, 1/10th of the deficits under Obama, Reid & Pelosi. Too bad Obama isn't a leader nor is he very smart. We will suffer until he is thrown out of office.

  • Made In USA Aug 19, 2011

    YOU ALL have the power to fix America's wallet. It will be painful, but not as painful as what's ahead if we don't change what products we buy.

  • Made In USA Aug 19, 2011

    The real problem is OUR shopping habits, the choices we make.

  • Made In USA Aug 19, 2011

    Our last recession was back in the early 80's under Regan's leadership. Manufacturing jobs brought us out of that recession eventually.

    This time, we don't have that factor coming into play. Those jobs have left and gone overseas. All the taxes those companies were generating for Uncle Sam is no long available. Well it is, but instead those funds are going overseas in the name of cheap labor and less taxation.

    Part of America's financial structure is missing, and has been missing for years. The only way to recovery people is to buy American-made.

    I hear you say there are none. I say a demand for them would bring them back. They'll cost more, but it would be worth the sacrifice.

  • gary13 Aug 19, 2011

    Obama grew up with entitlements as a way of life and look how good it did for him. He thinks everyone should live the same way. He just doesn't understand that if everyone is on the take, there is no one to pay his way.

    Our country is doomed until this affirmative action whiner is gone there will be no recovery.

  • Just the facts mam Aug 19, 2011

    If families can cut spending and live within their means, why can't the federal government politicians do this? The Tea-Party has been pushing for this, but Obama and the liberal Democrats cannot control their irresponsible spending habits. And all Obama cares about is getting re-elected - and he is willing to take this whole country down with him it that is what it is going to take!!!