The Great Recession: America Becomes Thrift Nation

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Photo Illustration by Arthur Hochstein; Wallet & Lock: Getty

Sometimes we change because we want to: lose weight, go vegan, find God, get sober. But sometimes we change because we have no choice, and since this violates our manifest destiny to do as we please, it may take a while before we notice that those are often the changes we need to make most. We ran a good long road test of the premise that more is better: we built houses that could hold all our stuff but were too big to heat; we bought cars that could ferry a soccer team but were too big to park; we thought we were embracing the simple life by squeezing in a yoga class between working and shopping and took an extra job to pay for it all.

Now we're stripping down and starting over. A platoon of TIME reporters and pollsters fanned out to every corner of the country to measure — anecdotally and empirically — what's changed in the way we set our priorities and spend our money since the Great Recession began. Most people think the pain will be lasting and the effects permanent: only 12% expect economic recovery to begin within six months, half believe it will be another year or two, and 14% believe we are at the start of a long-term decline. (See TIME's special report on how Americans have adjusted to the recession.)

Our institutions watch for economic vital signs. But maybe, for individuals, the sickness is what came before — the hallucination that debt would never need to be repaid, that values only rise, that bubbles never burst. When the markets collapsed, that fever broke. In our assumptions and attitudes and expectations, the recovery is already well under way.

Talk to people not just about how they feel but about how they're living now, and you hear more resolve than regret. Nearly half say their economic status declined this year, and 57% now think the American Dream is harder to achieve. And yet pain and promise are a package deal; even after all this, fully 56% believe that America's best days are ahead. It would be nice if it took something short of a heart attack to get us to work out, eat better and spend more time with our kids. But in the end, where we wind up matters more than how we got there.

Unlike any other downturn since the 1930s, this one has affected everyone, either the fact of it or the fear of it. Even when prosperity returns, 61% predict, they'll continue to spend less than they did before. Among people earning less than $50,000 a year — roughly half of U.S. households — 34% have not gone to the doctor because of the cost, 31% have been out of work at some point, and 13% have been hungry. At the same time, 4 in 10 people earning more than $100,000 say they are buying more store brands, 36% are using coupons more, and 39% have postponed or canceled a vacation to save money. Forty percent of people at all income levels say they feel anxious, 32% have trouble sleeping, and 20% are depressed. After a season of big news, of war and storms and swindlers, pirates and poison peanut butter, 43% are watching the news even more, taking the medicine even if it tastes bad because skipping it could be risky. (See the worst business deals of 2008.)

The calculus of life suddenly offers new equations. Insurance agents see clients raising their deductibles to lower premiums, or skipping collision coverage for older cars so that they bear more of the risks themselves. Twenty-seven percent have raided their retirement or college savings to pay the bills. Violent crime may not be up, but fear of it is: 40% of people say that since the downturn began, they are more worried about their personal safety. Gun sales at large retail stores have jumped 39% this year, according to the SportsOneSource, a research firm that tracks the sporting-goods industry, and shops are reporting ammunition shortages; they can't keep up with demand.

For all the reflexive analogies, this is not the 1930s, when Babe Ruth took a $10,000 salary cut (roughly what A-Rod earns per swing) and New York City Mayor Jimmy Walker told theaters to show only cheery films. And yet we're channeling our grandparents, who were taught, like a mantra, to use it up, wear it out, make it do, do without. Now, if you can make it, you don't have to buy it: just replace the lawn with a vegetable garden, eat your fill and then store whatever is left. Sales of canning and freezing supplies rose 15% during the first three months of the year compared with the same period last year. Cough- and cold-remedy sales are down 9% because you can make your own chicken soup; vitamin sales are up, maybe because you hope you won't need to. Common sense is back in style, meaning we're less willing to buy what we can have for free: bottled-water sales have dropped 10%. The 137-year-old Los Angeles public library system set record highs in circulation and visitors. And film and camera sales have plunged 33% this year, because who would want this winter in their album?

There's a natural longing to find the upside in the downturn. A college-admissions officer, watching families reassess their means and ends, suggests that maybe the insane competitiveness will recede. The yoga instructor says living more simply relaxes us, as if the entire country needs to slow its breathing. The buyer at the used-car lot feels both frugal and green: that hatchback isn't used, it's "pre-owned," and this counts as recycling. The discount shoppers view their task as a scavenger hunt and take a certain pride in finding the bargain, cutting the deal; 23% of us are haggling more, a profitable contact sport.

No one wishes for hardship. But as we pick through the economic rubble, we may find that our riches have buried our treasures. Money does not buy happiness; Scripture asserts this, research confirms it. Once you reach the median level of income, roughly $50,000 a year, wealth and contentment go their separate ways, and studies find that a millionaire is no more likely to be happy than someone earning one-twentieth as much. Now a third of people polled say they are spending more time with family and friends, and nearly four times as many people say their relations with their kids have gotten better during this crisis than say they have gotten worse.

A consumer culture invites us to want more than we can ever have; a culture of thrift invites us to be grateful for whatever we can get. So we pass the time by tending our gardens and patching our safety nets and debating whether, years from now, this season will be remembered for what we lost, or all that we found. 

With reporting by Karen Ball / Kansas City; Laura Blue / Princeton; Laura Fitzpatrick / New York; Steven Gray / Chicago; Hilary Hylton / Austin; Christopher Maag / Cleveland; Betsy Rubiner / Des Moines; Tiffany Sharples / Seattle; Maggie Sieger / Grand Rapids; Alison Stateman / Los Angeles and T.R. Witcher / Las Vegas

See pictures of the recession of 1958.

See pictures of Americans in their homes.