Debt And Dopamine: The Ghosts Of Christmas Present

Authored by Amy Denney via The Epoch Times (emphasis ours),

Most every Christmas growing up in the 1950s, Brad Harris got socks, a new pair of jeans, and—if he was fortunate—a new sweater.

He lived with his mom, who was a single parent, as well as his grandmother, great aunt, and younger brother. Finances were tight, but there was always food on the table, including a big dinner for Christmas.

“We never felt deprived, but we didn’t compare what we had with other folks,” Mr. Harris, 87, told The Epoch Times. “It was a wonderful time really. It was a lot less frivolous. I think it made a better generation of us.”

To help with family expenses, he usually held more than one job at a time—including delivering newspapers until he graduated high school. It was a big delight one year when he received a Hawthorne bicycle with a tank and headlight for Christmas.

“It was one of my prizes, and I rode that thing clear through high school,” Mr. Harris said. “I had probably worn out two or three bicycles carrying papers.”

Decorations were sparse—they couldn’t afford a tree so they usually cut down a fresh one from a friend’s property—yet the Harris brothers never forgot to buy something for mom. One year, it was a set of clear pink serving dishes for eight that cost no more than $3.

These days, Mr. Harris no longer tries to pick out meaningful gifts for each family member. He has 14 great-grandchildren. He makes homemade caramel and hands out cash.

There’s not much the kids want that they don’t already have, he said.

“We found a long time ago, 100-dollar bills fit everybody, and the color’s right,” Mr. Harris said. “I spend more on Christmas than my mother made in a year.”

Spending Obsession

Christmas gift giving in the United States has always been a big deal, but it seems to continue getting bigger. Data available for the past 20 years shows overall spending has nearly doubled since 2003, climbing every year except during the financial crisis in 2008. The National Retail Federation (NRF) predicts growth will be a bit lower—3 to 4 percent—in 2023 than in 2022.

Total holiday spending this year in America is expected to be at least $937 billion, according to the NRF. Back in 1950, total holiday spending was $40.2 billion, but that's without factoring in inflation and population growth.

Those were the days before credit cards, before storage units, before America’s massive rise in household debt. Those were the days when it was easy to buy a Christmas present because everybody needed something.

Americans have always spent a lot of money during Christmastime. What has changed dramatically is how much they spend the rest of the year and how much they borrow to maintain that spending.

Shopping has become a year-round obsession, turning Christmas gift-giving into an obligation and sometimes even burden. Often our presents are just more clutter.

Remembering the value of more meaningful and necessary gifts of generations past could help us shift our focus from the materialism of gifts to the act of giving and the value of relationships.

When It All Changed

The Sears catalogs, including the once-annual Wish Book and Christmas catalogs, really took off as credit started to appear. Even back in 1956 the "Sears Christmas Book" was more than 450 pages of toys, tools, clothing, houseware, and more—all promoted as the perfect gifts for loved ones.

The catalogs provided inspiration for new Christmas gifts that weren't so obvious as a needed sweater. Every American could imagine a new level of consumption, with items they never would have considered buying now displayed in enticing variety.

Of course, all that possibility meant little without the means to pay for it—and incomes were still limited just as they are today. However, Americans’ spending habits were suddenly no longer restrained by their pocketbook.

Whereas merchant credit had previously been associated with wealthier customers, the post-war years saw an explosion in consumer loans and credit cards for a rapidly growing middle class.

A telling statistic is the household debt to income ratio, which tells how much of a household's monthly income goes towards debt payments. The higher the ratio, the more monthly income goes towards debt payments.

The Institute for New Economic Thinking thoroughly examined debt from the end of World War II, when the household debt-to-income ratio was 30 percent, to 2016, when that debt ratio hit 120 percent. In other words, by 2016 the average American household was going further into debt every month.

“The American household debt boom of the past decades was first and foremost a middle-class affair. Middle-class incomes grew by 20 percent since 1970, middle-class debt by 250 percent,” the institute report said. In other words, we now spend far more than we make, a dramatic shift from the 1950s.

Rachel Cruze, a financial expert at Ramsey Solutions, a firm that helps people reconcile debt and make better financial decisions, says Americans are spending themselves into excruciating debt.

“Credit card debt itself has reached over a trillion dollars, the highest in history,” Ms. Cruze told The Epoch Times.

Our debts have become so great they could be considered a public health issue. One study published in 2018 in PNAS found “overspending and over-indebtedness ... leads to social exclusion, feelings of loneliness, an unhealthy family environment, and suicidal thoughts, and it reduces social support. Also, one of the biggest problems with debts is that they often unleash a spiral of further debts. This spiral can ultimately bring people into poverty.”

The study found that when low-income families were given three times their monthly income for debt relief, those who used it to pay down their debts instead of making other purchases experienced a proportional improvement in cognitive function and reduced anxiety.

How the Glut Stole Christmas

One of the big lessons from the Grinch that has proven true over the past 20 years is that it isn't a lack of presents that can ruin Christmas. In fact, presents can be the thing that buries our Christmas spirit.

Credit lit the fire of our current consumerism, but cheap Chinese goods added plenty of fuel.

Suddenly, everybody could have everything at cheap prices made all the cheaper by underpaid workers and poorly made products. Items that once lasted a lifetime now become obsolete, broken, or out of fashion within a few years.

Ms. Cruze shared her own struggles with purchasing on her radio show. Her new book, “I’m Glad for What I Have,” was inspired by an innocent but uncomfortable encounter with her youngest child that revealed her own consumption problems.

“My 4-year-old said a few months ago, ‘Is the Amazon guy coming today, Mom?’” Ms. Cruze said.

While credit and cheap goods certainly enticed us to buy more, companies learned better how to hijack our own biology as well. Big Tech has made pervasive use of neuromarketing to figure out exactly how our brains work, and how to make us buy.

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