How America turned into a consumption culture

So how did America position itself in the world between the 1940's and the 1970's? Well one word can best explain what America did: Consume.

With the millions of working age men returning from the war, America needed to jump start the economy to provide jobs. The first step was to keep interest rates low. This allowed people to borrow money to buy homes, cars, gadgets, and toys...really cheapily.

As Housel explained:

""Consumption became an explicit economic strategy in the years after World War II.""

After 1945, to recover from the war and to alleviate our reliance on an export business to nation's that were rebuilding, America turned inward.

"After 1945, America again diverged from patterns of savings promotion in Europe and East Asia … Politicians, businessmen and labor leaders all encouraged Americans to spend to foster economic growth."

It was during this period that the first credit card was introduced in 1950. The loosening of Depression-era regulations allowed for an explosion of consumer credit. Store credit, installment credit, personal loans, payday loans - everything took off. And how could you fault the American populace, whom just survived two great wars of the greatest depression of America's history, when the government was giving tax deductibles on all interest on all debt, including credit cards. Of course it will create a society of consumption, that we are still dealing with today.

This is where the trouble lies for America stands as we enter a new decade.

"Sharp inequality became a force over the last 35 years, and it happened during a period where, culturally, Americans held onto two ideas rooted in the post-WW2 economy: That you should live a lifestyle similar to most other Americans, and that taking on debt to finance that lifestyle is acceptable."