Spend Your Money!! Stop Saving!! (Daniel Gross in Newsweek)

[Mari333]

'For our $14 trillion economy to recover and thrive, hoarders must open their wallets and become consumers, and businesses must once again be willing to roll the dice. Nobody is advocating a return to the debt-fueled days of 4,000-square-foot second homes, $1,000 handbags and $6 specialty coffees. But in our economy, in which 70 percent of activity is derived from consumers, we do need our neighbors to spend. Otherwise we fall into what economist John Maynard Keynes called the "paradox of thrift." If everyone saves during a slack period, economic activity will decrease, thus making everyone poorer. We also need to start investing again—not necessarily in the stock of Citigroup or in condos in Miami. But rather to build skills, to create the new companies that are so vital to growth, and to fund the discovery and development of new technologies.'







http://www.newsweek.com/id/189232

what world does this guy live in? shame shame on the consumers out there who are living from hand to mouth and watching their tax monies get thrown into the black hole of bailouts..shame shame on the consumers who balk at the 600 billion plus dollars poured into the blackhole of the military budget..
just get out there and spend! That will fix everything!
asshole.

[lonestarnot]

1. Simply genius aren't they...

:puke:

[Squatch]

2. Spending (esp on credit) is what got us into this mess, A-hole

[ProfessorGAC]

7. Again, That's Not What He Said

You're right, that excessive credit caused a lot of this. But, he's talking about those people who HAVE the money. So, the consumption element that is NOT based upon borrowing is dependent upon people with spending power to spend.

I don't see anything in this article that suggests he's encouraging excessive spending. The first paragraph even says just that.
GAC

[Deja Q]

3. Tell him to convince employers to invest in their existing staff instead of offshoring.

Our economy is crucial to the survival of the global economy too.

We're doing our part by getting educated, et cetera, but if the jobs that allow such spending don't exist, people will give up.

And, as usual, in our "blame the symptom and there is no such thing as a root cause 'society'", the consumers will be the blame. Again. As usual.

[JVS]

4. This can't happen unless merchants are willing to cut some deals

I'm hearing about stores trying to charge more because "business is down" and they want to make more money by making more on each sale. They're only making things worse for themselves.

[Mari333]

5. omg I have seen that all over my small town

and its backfiring. the prices on everything are much higher. the local people, therefore, who make minimum wage at service jobs, dont have anything to do with the downtown area..we are a tourist town, but throughout the winter, only locals live here..
in the past, the prices of everything went up only in the summer, and the local people could meander over to the restaurants and shoppes and buy a few things..
not anymore. but now the shoppes are empty, and no one is buying. a meal for 2 costs 30 dollars. thats a heating bill for a week here ..
there has been a flurry of letters in the local rag complaining that locals wont buy anything downtown..these letters were from semi locals who live here part time from chicago
well, then pay us higher wages, or drop the prices!

[JVS]

10. Sounds like South Haven MI. There is downtown, and then a Walmart and some other stores across...

the highway. There's also a Sav-a-lot in town, but other than that, stuff in town is expensive.

[Deja Q]

17. Well, I can't blame them for trying... the same model worked for insurance companies.

:evilfrown:

[exboyfil]

20. I wonder how close merchants are to hitting the variable cost

of their goods. Given all that is going on in the economy, I have been surprised at how little reductions in prices I have seen in some goods (talking discretionary items like electronics). The only way they are going to get me to open my wallet and replace my one 20+ year old hand me down television is with a really good deal on a 32" LCD. Even then I am probably more likely to cancel my cable and get some rabbit ears (if my wife would agree).

I am saving right now, and I plan to save even more. My oldest has college in 5 1/2 years and to say the least, her 529 plan has not done well.

Another side thread is this whole outsourcing concept/H1-B situation. As an individual whose company denied him the opportunity to interview for his "dream" job and later hired a sponsored worker for that position, I would have to say yes - outsourcing has an impact on me (as I think it does for workers starting with low skilled all the way to professional).

[ProfessorGAC]

6. That's Not How I Read It

And there is a huge influence of confidence on economic growth. He's right that the only way the economy recovers, is for those who do have spending power to spend it. If people are hurting, i don't this guy is blaming them for anything. I think he's talking about people who CAN afford it, but are not spending right now, due to a lack of confidence in the system.
GAC

[Mari333]

8. my bad, than

I dont know anyone who can afford to spend anything. :)

[ProfessorGAC]

13. Well You Do Now!

My wife and i have a good income. And, since we DIDN'T buy a $400k house, we own it outright. That doesn't mean i'm following this guy's advice, though. In fact, my wife and i are the kind of people he IS talking about.
GAC

[madrchsod]

9. keynes is right...saving money only makes the problem worse.

there is a huge demand for goods but no one has the money or confidence to buy.

the real problem is the deflation of wages since the mid 70`s and the stripping of middle class employment. nothing will be solved until wages are increased and a manufacturing base is restored in this country.

[JVS]

11. But as an individual, people save when they think that they are in danger.

People who think they're going to be layed off any week now are not going to spend money, they're wisely going to prepare for the worst. That's why the government needs to spend so much right now.

[Mari333]

12. amazing how often outsourcing is mentioned...its never mentioned

I never see this mentioned by pundits and economists..the outsourcing of decent jobs and income, and I never see anyone mention the Unions being destroyed by reaganomics..the disconnect is huge..perhaps it is because people who write for major news organizations have never lived on a mimimum wage salary.

[Deja Q]

18. Quite.

[sendero]

24. That and so much more....

... I think it's laughable how these concerned columnists come out of the woodwork with their oh-so-sage advice telling us the obvious.

Well guess what. I have the money but I'm NOT going to spend it. Why buy something now that will be cheaper later? I, as the free market worshippers are quick to quick to point out, am operating in enlightened self interest mode. My actions did not create this mess, but now I have to survive and I will do whatever I need to for me and my family.

I don't think anyone with 2 brain cells to rub together is going to modify their behavior based on these bleating assholes.

[Mari333]

25. I wish I was a wishing well

I would wish all of the economists and reporters and journalists in every news organization to live on 7.25 an hour for a year. I would wish to watch them have to choose between eating one week, or heating their house that week. I would wish for them to live with no lights on at night because they cannot afford the electric bill. I would wish for them to walk for 8 miles carrying groceries on their backs from Wal Mart because their auto was reposessed due to non payment. I would wish for them to sit in a rocker, huddled up with 3 blankets in -5 degree weather because they have no money to pay the gas bill. I wish I was a wishing well ..and they could write from another perspective,.

[sendero]

26. Nothing in any part of the media..

.. or popular culture for that matter - deals with the way legions of Americans actually live.

To watch TV or the movies or the news, you'd think everyone was planning the purchase of their next piece of jewelry or Lexus.

It's sad. Just act like the problem doesn't exist and it doesn't.

[Mari333]

28. oh, hey thats one reason I dumped my TV

I couldnt stand it anymore.
I would switch on CNN and see people who looked like call girls and hookers doing the news..complete with draining sinuses , whining as they blathered on and on..even the men..people whose mums and dadums paid their way through georgetown and harvard..whose brains rattled around in their skulls, kids who never worked an actual job in their lives..same thing on the other news channels..
so I thought, what the hell, and the TV was tossed. I prefer low blood pressure. :)

[Joe Steel]

19. The Problem Isn't Borrowing

the real problem is the deflation of wages since the mid 70`s

That's the problem. It wasn't borrowing too much. It was not earning enough.

We allowed capitalists too much control of our economy. They offshored and outsourced and downsized and reorganized. The next thing we knew, the good jobs were gone, the only way to buy groceries was running-up the credit cards or borrowing against the house.

[Mari333]

22. yes, I worked in a grocery store for a while

and I watched people buying load after load of groceries with credit cards..
yes, not earning enough and outsourcing....since the 80s, when Reagan disbanded the Unions and gave corporations huge tax breaks and promised they would rebuild america..they didnt, they took their new money and ran to mexico, china, and bangladesh..and we are now reaping that whirlwind of stupidity.

[madrchsod]

27. i was making 8-14 an hour in 70`s

i was a union worker at a steel forging shop that was paid piece work. we had 12 hammers runny three shifts 5 days a week..1980 the company started going under and today the same shop has one hammer, one shift,and 5 days a week.

next time you see tools or other steel forgings they will have a made in china on them that was once my job

[Orsino]

35. Agreed...and that point would be relevant were not the corporations laying us all off.

Americans aren't "saving." They're conserving because they don't know when the next CEO will cut them off.

When the corporations calm the fuck down, citizens will, too.

[historian]

14. hmmmmmmmmmm

Let me see. The average wal mart or best buy consumer sees his wages stagnate or actually fall. He knows that he has a fat chance of collecting his pension since the company will have long disposed of it. He is well aware that if his job can be sent to India it will and the American consumer can go f..... himself which he usually does anyway.
Now what else is wrong with this picture? oh yes go out and buy the latest computer, return the following day to find it obsolete and selling at 1/2 the price. You cant even recoup anywhere near the price you paid for it. We try and be sensible by buying small cars or hybrids only to see our so called governors (Arnold in my case) zip by in his Hummers at state expense. Now what does that mean??MMMMMMMMMMMM oh i get it. If i spend, ill have to pay an 8% tax on the goods, that goes to govt, increases the revenue (which has already been spent) so Arnold and his Hummers wont be quite as conspicuous. After all, we have the money. Here look at this - it says so in the Sacramento Bee, a newspaper with the eloquence and knowledge of an 18th century British dock worker.
all right so that wont work so lets join the army and show everyone unselfish we are. Willing to face death for the good of all. Hey wait a minute what do you mean im going to Iraq? I only joined so you could pay for school! Screwed again.
Oh i know ill invest in the stock market and, according to my broker, if the fund continues delivering 55% annually i can retire with devalued dollars when im 107. (the past is no indicator of the future).
And that my friends is why we are so screwed.
Now for a fat joint

[Mari333]

15. lol wish i could recommend your post nt

[Joe Steel]

21. What's your point?

Just get stoned?

[historian]

31. no nothing to do with drug

What I am saying is that we don't get off our collective medieval behinds and do something we are doomed to repeating the same mistakes over and over. Wasn't it Jefferson who said that in order to preserve democracy or freedom a revolution is needed every 10 or 20 yrs? We see wrong doing on a daily basis and i have yet to see a senator, a bush/cheney sitting in a cell in leavenworth being buggered by a 500 lb bubba.
Apart from all that, we constantly re elect the same morons over and over again and its only when we are dangling by our nuts over the edge of a cliff that we finally "decide" to do something about it. Obama or no Obama, there is nothing he can really do. If he steps on the wrong toes you know what the consequences will be.
Furthermore, and i can say this with certainty since i live surrounded by these so christian loonies that the level of ignorance is so great it is no wonder we are in this mess.
And when things get tough for the repbulicans in particular they raise the horrid specter of homosexuals marrying. Can you think of anything more devastating or life threatening than that? Our atmosphere is changing, we have A bombs we cant account for, we send arms everywhere so we can encourage wars in the name of profit and what do we hear? Against the war? What are you some of pinko liberal faggot?
You get my gist.

[KharmaTrain]

16. So Taking On More Consumer Debt Will Fix This?

And these are the asshats screaming about the government spending like crazy. At least when the government spends on projects, it goes into local economies...CREATES jobs that then create tax revenues that in the end go back to repaying the debts.

Now how does someone "roll the dice" when there's no credit to be had, Einstein? Has this shitstick tried to get a small business loan these days? Unless you have the full value of that loan in cash, don't even think about it.

So I guess this fukwad expects the same goons who created this mess to "restore" propserity. These people deserve to be ridiculed.

[AndyA]

23. Hey Daniel: tell the credit card companies to reduce their interest rates.

With rates in the 24 percent plus range, few are going to be shopping unless they have cash in hand. And with today's outsourced job market in America, chances of that are slim.

What kind of a right wing idiot are you, anyway?

Never mind...you're all the same. :eyes:

[Kolesar]

29. I am going to pay somebody to put in a brick patio as my response to the recession

The project will stimulate the economy and add some value to our house. I think it is better than just letting my dollars sit in a bank account.

[ejpoeta]

30. As Suze Orman says..... you have to be concerned about your own personal

economy right now. Unless you have all your credit cards paid off, have 8 months of money set aside and can afford it.... you can't afford to help the economy right now. This is part of the problem. That instead of having a manufacturing base or something we are producing to support our economy, we have credit and spending as our backbone. That is not sustainable. It's like we are playing a shell game with our money. Just passing it around and somehow that will keep us going. It won't.

[BlooInBloo]

32. Um.... we don't HAVE any money you stupid fuckers. The banksters STOLE it all - remember?

Sheesh.

[neverforget]

33. I'm going to keep saving because when I am laid off, I need some money

to fucking survive you dimwit.

[azmouse]

34. IF you have a few dollars to spend this can be a good time to get deals.

Still, I admit to being very careful about what I buy. I did need some clothes for the summer so I took advantage of a sale at Penney's... I spent $115. Those same items at full price would have been $275! And I bet the store still made a profit off the sale even at the greatly reduced price.