NCPA - National Center for Policy Analysis

The Go-Go '90s

September 15, 1997

The Reagan tax cuts of the 1980s and a steady-handed policy on the part of the Federal Reserve are being credited for the current economic boom. Consequently, Americans are enjoying more luxuries than ever before, economic analysts point out. But are consumers going overboard?
  • Luxury car sales now account for 23 percent of all car and sport utility vehicles sold, reports the Ward's Communications group -- compared to a 1980s peak of 15 percent.
  • Wine and champagne sales are higher than at any time in the 1980s, according to the Wine Institute, and premium cigar sales have tripled since 1989 reports the Cigar Association of America.
  • Nearly 25 million people are playing golf these days, estimates the National Golf Foundation -- half a million more than in the peak year of the 1980s.
  • The dark side of the picture is that total household debt -- including mortgages, credit cards and other loans -- represents almost 99 percent of total disposable income, according to A. Gary Shilling & Co.

Moreover, consumer installment debt as a share of after-tax personal income is at a record level and the delinquency rate on bank credit cards has hit a record high.

Meanwhile, the number of people filing for bankruptcy shot up to more than 1.2 million in the year ended June 30 -- more than twice the figure in 1989 and a new record.

Source: John Merline, "The Greedy, Spendthrift 1990s?" Investor's Business Daily, September 15, 1997.


Browse more articles on Economic Issues