Why Americans' 'YOLO' spending spree baffles economists

The question that should be asked by the experts are &quot;which of our economic indicators is wrong?&quot;<p>Instead of &quot;why are millions of people acting irrationally&quot;?<p>The behavior we&#x27;re witnessing is perfectly predicted by models with certain underlying inputs. In particular inflation being higher (or perceived as higher) than what is reported.

The &quot;economists&quot; bin appears to hold a few brighter bulbs:<p>&gt; &quot;When you don&#x27;t really know what the future holds – or even if there&#x27;s a long enough future for you – people are focusing on the present and the short-term horizon&quot;, says Chiraag Mittal, an assistant professor of marketing at the McIntire School of Commerce, University of Virginia.

This seems like standard holiday forecast on holiday spending. (It’s going to be great for retailers this year.)<p>Meanwhile, back at the ranch, housing costs continue to rise like crazy. Some have it (at 2% interest rates) and others don’t, with rising rents.<p>If people spend money the way they drive their cars (ignoring the rules of physics when driving 70 mph with 2 second following distance) then I predict a fast crash tangled mess.

Perhaps the key is uncovering and disambiguating root motivations on an individual basis: magical thinking, catastrophism, poor impulse control, poor planning, self-sabotage, and unrealistic expectations.

I think I&#x27;d wait a bit longer before deciding that this is isn&#x27;t just inertia&#x2F;momentum spending. And Taylor Swift isn&#x27;t touring in the US until late next year...

Maybe...just maybe...the economy is doing quite well? And people are optimistic about their future? And the news media, led by FOX, is trolling Americans, trying to get them to believe the economy is doing poorly and thus prove that Bidenomics is not working? In almost every poll, Americans have said the same thing: &quot;The Economy is terrible, but I&#x27;m doing juuuust fine.&quot; We are witnessing the effect of the full strength of social and broadcast media gaslighting the American people, and it is a terrific (meaning great, not good) thing to see.