For families hard hit by recession a new very practical fad involves using large numbers of store and product coupons. An article in the Washington Post reports on women who are cutting their grocery bills by an order of magnitude or more (and I'm thinking they must not buy much in the way of fresh fruits and vegetables). To illustrate just how far extreme couponing can go some are stealing coupons from newspaper racks.
Yoder and other extreme coupon cutters acknowledge some participants do cross the line.
In Idaho, two newspapers reported this month that coupon inserts were being stolen from their racks. The state’s largest newspaper, the Idaho Statesman, set up a sting in Boise and filed a police report after a woman was caught pulling the ads from more than a dozen copies.
A sign of desperation? The article reports a doubling of coupon usage in 2009 as the recession cut incomes. Imagine what people are going to be willing to do once we enter a full economic depression. Many cost-cutting strategies stop working once too many people try to follow them. As long as heavy coupon users make up a very small fraction of all buyers the coupon issuers can still use coupons to reach out to new customers. But once purchases coupons cease to generate follow-on purchases without coupons the coupon business becomes untenable.
Coupons for food are going to become even more popular. US food inflation was 4.8% over the last 12 months. My advice: Try ever harder not to be poor. Get yourself into a higher income bracket, a more secure job, a better career path. Life for the bottom half is going to get worse.
Looking hard at US consumer behavior and the depth of the underwater US housing market make strong economic growth seem like a pipe dream. Personal austerity, like government austerity, can't be avoided at this point. Yet austerity means less economic growth (e.g the anemic US economic recovery) or even contraction. Look at Greece as an example: In Greece the already shrunken economy is going to contract another 3.75% in 2011 and it is going deeper into debt even as austerity measures take hold.
Greece’s debt is expected to peak at 172 percent of its annual economic output, substantially higher than the 150 percent of gross domestic product estimated when the joint IMF-European Union rescue was approved last year.
Greece is beyond the extreme coupon stage. The danger signs are starting to flash for Italy too. Italy is a domino big enough to cause a wave of sovereign and bank defaults. If those dominoes start falling then severe world recession is a likely consequence.
The US government has bigger tools with which to put off a reckoning. But harder times are headed our way as well. Extreme coupon usage is going to become an even more common practice. Peak Oil will cause Peak Debt and that that puts us at risk for a vicious cycle. An aging population and declining average skills will take their tolls too. American decline is real this time.
|Share |||By Randall Parker at 2011 July 09 12:34 PM Economics Family|