The end of the Shopaholic Nation?

Gen Yer Russell Simon embodies that way of thinking. The 26-year-old has furnished his Washington, D.C., apartment with used furniture found on Craigslist, uses a canvas bag to bring home groceries and gave up his 1999 Subaru Impreza Wagon. He fills his time with activities, such as swing-dance lessons, that don't involve buying things.

Though he's glad his anti-consumption ways have a positive effect on the environment, Simon's motivations are more self-serving. "It's about uncluttering my mind, uncluttering my space and allowing me to focus on things that matter," he says.

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Cindee Mazzanti, a self-employed 57-year-old living in upstate New York, started downsizing in 2001, when the end of the dot-com bubble made her realize the importance of living within one's means. She sold her home and used the equity to pay off her debts and purchase a smaller home without a mortgage. She also traded in her Ford Freestyle SUV for a more thrifty Ford Focus to lower her fuel costs and help reduce America's demand for foreign oil. Her monthly living expenses shrank from $5,600 to $1,200. Without debt, she says, she feels free.

Retailers are doing what they can to woo these new, economy-minded consumers. Last year, Starbucks began offering new rewards on its stored-value cards, including free refills on hot and iced brewed coffee and complimentary syrup and soy milk.

"This was an opportunity . . . to show Starbucks can be a part of people's lives even when budgets are tight," says Brad Stevens, the vice president of Starbucks' customer relationship management.

A drive to spend

But what happens once budgets aren't so tight? Plenty of hardheaded economists say we'll go right back to our prodigal ways.

Alan Blinder, an economics professor at Princeton University and a former Federal Reserve vice chairman, thinks that optimism and the drive to spend are hard-wired parts of America's cultural DNA. Blinder expects that even baby boomers will continue the spending spree that has defined most of their lives, buying medical care and golf vacations instead of new cars and larger homes.

Balanced economy

Even if Americans do curtail their spendthrift habits, in the long run, the result would probably be a healthier and more balanced American economy.

If as a nation we bought a bit less and saved a bit more, economists say, the result would be stronger long-term economic growth. And depending on the kindness of strangers to perpetually finance your lavish spending sure seems risky. If the foreign appetite for U.S. dollar assets abated, says T. Rowe Price chief economist Alan Levenson, the dollar would probably weaken further, reducing Americans' standard of living.

Besides, there is more to the economy than just the consumer. The economic boom of the 1990s was led by business investment, especially in technology, aiding a boost in productivity that continues today. Though many businesses are currently holding back on investment, they are likely to beef it up after our financial criris passes, says Robert Brusca, the chief economist at Fact and Opinion Economics.

And Uncle Sam will have a big role to play, investing stimulus money on upgrading our national infrastructure and advancing alternative energy technologies.

"We're at a critical moment," says Benjamin Barber, the author of "Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole." "In two or three years, we might say, 'We had a moment where the banks were broke, credit cards didn't have much credit left, when Americans were beginning to rethink consumerism, when we really could have turned the page,'" Barber says. "Or we might be saying, 'We talked ourselves back into the old fixes,'" such as rebate checks and even telling Americans directly to go out and spend, as President Bush did after 9/11.

With baby boomers' habits well-ingrained, it may instead be members of Generation X and Generation Y who decide to embrace a simpler, less wasteful lifestyle, rebelling against the conspicuous consumption that their parents helped make the American way of life.

This story was reported by Kimberly Palmer for U.S. News & World Report.

Updated March 20, 2009

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