Are Americans Still Spending Too Much?

This is totally anecdotal (and absolutely not enough to support an affirmative answer to that headline) but something really caught my eye in this AP story about how consumers are scaling back insurance as a response to the recession.

W.W. Johnson is between jobs, and currently on an unpaid internship for health administration. His wife's job in communications is dicey. So, he called his insurance broker and slashed the coverage for his Kennedale, Texas, home and five cars.

If you only are working an unpaid internship, and your only other source of income is your wife's "dicey" job, why would you maintain ownership of five cars? Kennedale is a suburb of Fort Worth, so it's not like this is a rural or agricultural community where people might need more vehicles than the norm.

Spending beyond one's means is partially what got us into this recession. We will need consumers to spend to get us out of it, for sure, but we also need smart consumer decisions.

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