Book review: Going Broke

Examines the steady increase in debt and decrease in savings by American households since the 1970s. Vyse ascribes this to the increasing number of ways we can spend money and the increasing speed with which desires can be fulfilled. He argues that that research shows we value immediate benefits much more than a delayed payment; the curve of perceived value/cost vs. time drops off along a hyperbolic curve, not a linear or exponential one. We now live in a world where you can go online for 10 minutes and find $100 worth of neat products to buy, whether books, music, toys and trinkets, or porn, and these purchases are usually paid-for using a credit card whose statement will arrive in a few weeks and is due a few weeks after that. We hang out in shopping malls, coffee shops, and casinos for fun -- all places where we are being encouraged to spend money. This is not especially radical stuff, though it's nice to see the arguments laid-out and footnoted. A final chapter offers suggestions. Most are not surprising; every personal-finance book talks about controlling impulse spending and delaying purchases. But he doesn't suggest setting a budget and then sticking to it, which is common; instead he suggests curtailing your media consumption and the resulting exposure to advertising, which stokes your urges for new products that you probably don't need in the first place. I really liked the book for its examination of the literature and for giving me the concept of the hyperbolic demand curve, which will probably be useful in restraining my own spending.