American consumers carry 70 percent of the gross domestic product on their backs. Succumbing to the constant pressure to buy goods, we've increased our use of credit and abandoned our savings at a steady rate since the 1970s. Since 2005, Americans have had a negative savings rate, which means the average family spends more than it's disposable income.

When people feel wealthy, they spend more. Easy credit makes it even easier to spend and harder to save. That's why consumer debt has risen twice as fast as personal income for the last five years, says the Federal Reserve.

But there's other psychology at work. Americans are told it's their patriotic duty to spend, even as the dollar slips to 63 percent of the euro and the government adds billions more to its trillions of debt.

We've created a disposable culture, where fashion lasts less than one season, divorce is pandemic, and buying and bailouts are an American right.

The problem isn't job loss, lower home prices and a zero savings rate. It's our sense of entitlement.

If we're upside down, we feel we have the right to default on our credit cards and throw the housekeys back at the lender.

According to the Mortgage Bankers Association, the percentage of loans in some process of foreclosure are slightly over two percent (about 2.04 percent.) But the rate of loans that are delinquent are the highest since 1985, due to the increases in both subprime and prime loans.

That means that people with good credit are starting to walk away from their payments.

For example, the number of current subprime ARM loans, widely believed to be the culprit in the mortgage crisis, is seven percent of all loans, and 42 percent of foreclosures that have begun. But among the benchmark prime fixed loans which are 65 percent of all outstanding loans, a whopping 18 percent are starting foreclosure.

When you put prime loan defaults together with credit card defaults and foreclosures, it can also add up to consumers who don't feel responsible for his own debts.

One way to reverse that would be to throw some bailouts to the people who are keeping their heads, and this economy, above water. How about some tax breaks on capital gains for savings accounts? Or an interest-free month for those who pay their mortgages on-time and in-full for 18 months?

It's time to get creative here, folks, because what we're doing isn't working.

Published: April 22, 2008

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.