In written testimony to the House Financial Services Committee last week, Nouriel Roubini, professor of economics at New York University made some startling statements. Not only are we in a recession, there is a "serious risk of a systemic meltdown in US financial markets ... ."

Weak retail and auto sales, falling consumer confidence, the credit crunch, the housing and commercial recession, stock market correction, and a global economic slowdown point to a "severe" recession that will last longer and be harsher than the recessions of 1990-91 and 2001.

The reasons he gives for the severity of the current recession is threefold- housing -- which he predicts to fall 20 to 30 percent, the US financial system, and the over-burdened consumer.

"The U.S. consumer is shopped out, saving-less and debt-burdened," he says.

Currently, consumers are responsible for 70.5 percent of the gross domestic product through their purchase of goods and services. That's not the highest percentage in history, but its proving to be unsustainable.

For one thing, we can't afford what we're buying. The latest Commerce Department personal consumption report says that consumer prices have risen 3.7 percent in January while disposable income has risen only 1.2 percent for the same period.

Two studies have shown that consumers are so accustomed to spending that they've increased total credit card debt by 315 percent from 1989 to 2006, says research firm Demos. And delinquencies are the highest in three years, says CardTrack.com.

How did we become such a nation of shopping addicts?

Michael Armah, economist for the Bureau of Economic Analysis suggests the answer to why the consumer is carrying increasingly heavier loads of the nation's economy might lie in this table.

In 1929, gross domestic product was $103.6 billion. Personal consumption (consumers), composed of the purchase of durable goods, nondurable goods, and services, was $77.4 billion, or 75 percent of GDP. By 1933, when the Great Depression was at its worst, GDP was $56.4 billion, carried largely by the consumer at $45.9 billion or 81 percent of GDP.

In 1949, the most prosperous year of the decade following World War II, GDP was 267.3 billion and personal consumption was $178.5 billion, or 67 percent.

By 1954, GDP was $380.4 billion, personal consumption $240 billion, or 63 percent.

By 1963, personal consumption was $382.7 or 62 percent of GDP, as it was in 1978.

By the 1990s, personal consumption as a percentage of GDP was gaining. In 1991, during the recession, personal consumption as a percentage of GDP was back up to 66 percent and 67 percent in 1997. The percentage crossed back over the 70 percentile in 2001 where it has remained.

So what's made the difference?

When the economy is shaky, business pulls back, leaving consumers with the lion's share of responsibility for the economy, but there's also evidence that consumers are simply spending more.

Services, as a percentage of personal consumption, have grown exponentially. Think cell phones, cable TV, and the Internet. In 1929, services were $30.5 billion, or 29 percent of personal consumption. In 2007, services were a whopping 60 percent of personal consumption.

So here's my plan for avoiding the recession and getting housing back on track. Instead of an economic stimulus package, make the cell phone and cable companies give consumers rebates and better rates on our phone and TV services.

Published: March 6, 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.