Forget the fact that inflation, higher costs for education, Obamacare taxes and premiums, and record rents are the primary reasons why Americans have shuttered their spending over the past eight years, and instead trust in journalistic propaganda that villifies consumers as the ones at fault for the slow economy. Because this is the assessment of a so-called economic journalist for the Washington Post, who wrote on May 8 that if people just borrowed and spent, everything in the economy would be unicorns and rainbows.
American consumers aren’t what they used to be — and that helps explain the plodding economic recovery. It gets no respect despite creating 14 million jobs and lasting almost seven years. The great gripe is that economic growth has been held to about 2 percent a year, well below historical standards. This sluggishness reflects a profound psychological transformation of American shoppers, who have dampened their consumption spending, affecting about two-thirds of the economy. To be blunt: We have sobered up.
In theory, it’s easy to replace lost consumer demand. In practice, it’s not so easy. Businesses could build more factories and shopping malls. But with weaker consumer spending, do we need them? More exports would help, but economies abroad are weak.
Government policies are also frustrated. The Fed’s low interest rates don’t work if people don’t want to borrow. – Washington Post
It is sad but ironic that most economists in the mainstream today discount financial responsibility, and ignore the consequences of debt and bad behaviors. The American people lost a great deal following the 2008 Credit Crisis and housing bubble, with millions losing their homes to foreclosure and many more millions losing their jobs when the Great Recession hit.
But so-called economists like Samuelson from the Washington Post neglect to inform the public that tens of trillions of dollars printed by the Fed under the guise of ‘Quantitative Easing’ should have been spent on actually rebuilding the economy and creating better jobs, but instead that money went for speculative investing by the bailed out banks, and Wall Street bonuses to those who committed fraud during the MBS scandal.
The American economy should never have transitioned into solely a consumer one, where over 80% of all GDP is reliant upon the American people, and the government, buying goods and services no matter if they could afford it or not. And judging by the over $1 trillion in student loans that have enslaved the millennials for several decades, the over $1 trillion in auto loans that burden the working class, and the over $9 trillion in new debt created by President Obama’s tenure in office, how any sane individual can say that spending is the solution should demand their money back from their failed universities for their failed educations.
America became great not on creating inflation and economic growth, but on sound money, fiscal prudence, and happiness in knowing that the job one had could help lead to a comfortable lifestyle. And if Keynesian economists want someone to stimulate the economy by engaging in consumer spending, then they should tell the 1%ers to get off their butts and start spending the billions of dollars they hold in SAVINGS in banks in and outside the country, for that is where most of the money meant to create jobs and grow the economy actually went.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com,Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.