Americans Are Not Spending Because They Are SCARED SHITLESS About Losing Their Job

[Vinnie From Indy]

CNN's most recent poll shows most Americans are most concerned about unemployment. While not a surprising result, it seems that many are missing the point in the press and Washington. American's are firmly in a bunker mentality now and I predict that this position will harden with each and every monthly jobless number that comes out.

[burythehatchet]

1. Loss of Trust, as opposed to merely a lack of confidence. n/t

[bullimiami]

2. spot on. and the financial pirates are tightening the screws while taking the bailout money.

[sufrommich]

3. Actually, I wonder if Americans aren't also feeling like we're

waking up from a long uncontrolled buying binge.One good thing that may come out of this mess is a movement toward living within our means and a move away from hyper consumerism.I hope some of this "belt tightening" is permanent.

[TechBear_Seattle]

6. Indeed. Remember when "consumption" was a hiddeous way to die?

When did consumption become an economic necessity?

[CBR]

4. I agree...

The Minnesota Timberwolves (I think) offered consumers a deal -- buy season tickets and if you lose your job during the season, you will get a refund. Now I could not buy season tickets in the first place but I might be willing to make other large purchases with a similar deal -- even a pro-rated refund.

[mnmoderatedem]

5. or in a case like mine

have already lost their job, and see such a bleak job market, there's next to no hope.

Sorry to vent, just felt like bitching...

[GoCubsGo]

23. Me, too.

I can't spend because I have nothing to spend. It's been almost two years since I have had a permanent job. I need every penny I have for basic living expenses. If I had a permanent job, I WOULD start spending. I have no choice. My car needs replacing, I would like to replace the cardboard on my bedroom window with blackout curtains, my shoes need replacing, and my toaster oven is about to die, among other things. (I'm single. I don't like heating up my big oven when I don't have to.) Sorry Ford and Target and other retailers. I can't help you any time in at least the near future, as much as I would love to.

[KharmaTrain]

7. We've Been Betrayed

Of course most of us are worried about where the next paycheck comes from, but the problem is far deeper than that. Consumer confidence has been shattered. People not only have seen all this fraud and corruption, but now feel they're paying for it at every turn. If it's not higher costs on the necessities, then its yo-yo fuel costs as well as obscene bank interest rates that has strangled the credit markets. Confidence is gone...and nothing has been done to restore it.

Right now who in their right mind is going to invest? Other than the short-sellers who should be shut down, with credit frozen and interest rates at such high rates, this economy is in paralysis. Reality has set in for many of us...if you can't afford it, you don't need it.

As usual, the betlway is clueless in covering this story. Many have nice comfy gigs and have no concept of how close to the edge many of us are out here right now. It's an abstract game to them...which is so ironic as their own bottom lines are crumbling.

[Delphinus]

31. You're right.

We have been betrayed and they are TOTALLY clueless! They need to live in the real world - like the rest of us. Let them decide if they're going to eat or go to the doctor.

[cherish44]

8. Me, I'm just cutting down anticipating the return of $4 gas this summer

I put one of my paychecks every month into my gas tank for the better part of 2008

[customerserviceguy]

11. While I expect the price of gas to rise

as we approach Memorial Day (as it always does), I just don't see $4 gas in the cards. The summer driving season will be curtailed by people choosing not to take vacations, they'll just stay closer to home and figure out how to entertain themselves there. Also, look at the highways, you're competing with far fewer workers out there trying to get to their jobs, and fewer people running to the mall to buy crap they don't need.

[Missy Vixen]

13. There's only one reason we're not going to see $4 gas again

Barack Obama.

He will not sit still while the oil companies jack the price of gas into the stratosphere again.

Of course, I could be wrong, but I don't think so. Four dollar a gallon gas would bring immediate investigations.

[Nicholas D Wolfwood]

27. Investigations notwithstanding, I'm not sure what he could really do.

He could ask to "open the spigots", to use a much bandied phrase from years' past, but outside of that, I'm not sure what authority he has in this area. I'd certainly welcome specific suggestions - I'm just not seeing the options right now.

[Warpy]

28. The OPEC spigots aren't the problem

because with the price of oil below $50, they're keeping them open so they can make enough money to survive.

The problem is the refinery bottleneck. If any industry is ripe for nationalization, it's the refinery industry. The giants bought up all the indies in the 80s and 90s and closed them so they could completely control the amount of refined products and thus the price. A handful of companies are acting like a classic monopoly and government intervention is indicated, either to break those companies up or to nationalize the whole business as a step to recreating smaller, more competitive companies.

That will cost me money--a lot of it--but it's a necessary part of the process of recovery. I'd rather lose in the short term and gain in the long term.

[Missy Vixen]

33. Price fixing

Gouging

Believe me, if $4 gas came back, it would finish off what's left of the economy. The only reason the oil and gas boys knew they could get away with it before was because Bush was in office, and would do nothing about it.

[Nicholas D Wolfwood]

46. Yeah, but good luck enforcing it.

The source of the price fixing is largely OPEC's doing, and we don't have any governmental authority over them.

[backscatter712]

37. Exactly.

We were Enroned last year at the gas pump.

Note that the $4 gas came back down to earth after Carl Levin pushed to close the Enron loophole last year, putting oil trading and energy trading back under regulation.

And yes, Obama, and Holder and the DOJ and the rest of the relevant regulatory agencies will be on the ball this year keeping Big Oil from gaming the system.

Maybe we'll see $2 gas over the summer, maybe a little higher than that, but it's not going to get close to $4 or even $3.

[tonycinla]

45. Iran,Russia etc.

It is not just oil companies that control the price of gasoline.Iran and Russia are really struggling with the lower price of crude oil.The best "defensive" weapon for the common man is to conserve on all energy products.

[bluestateguy]

9. People's savings are piling up

I speak here of the perhaps 70% of Americans who are gainfully employed full-time. The only good thing about this is that once people's confidence is restored they will start spending some of that money that they have been socking away.

I would also suggest a second stimulus bill with a debit card for all Americans, and a mandate that you must spend the money, not save it, and not pay bills. Buy groceries, buy new tires for your car, whatever, but it must be spent.

[The2ndWheel]

12. And if you don't spend it?

[bluestateguy]

17. You would get a debit card

and it would be activated with X amount of money the way that a gift card is activated at a store.

If you don't spend it, then the card would simply expire and the money would go back to the Treasury.

[The2ndWheel]

20. Simple enough

It's just that the must part was a bit vague.

[customerserviceguy]

14. The "savings" rate also goes up

when people pay off debt, it has the same effect on your net worth whether you pay off a credit card or put money away in a savings account. Frankly, you're better off paying the card, and saving the cost of an interest rate that is far greater than any amount you'd receive on a savings account, even in a non-profit credit union. I don't think there is this pool of hoarded money out there waiting to be spent on more toys and goodies when happy days are here again.

There might be a possibility of whipping out the charge cards again, but if people have been getting their limits cut, that won't necessarily happen. Also, it surely would indicate a fear of inflation, I remember using 12% credit cards in the late 1970's to buy stuff that was inflating at 16% in price.

[OwnedByFerrets]

16. And that would be mandated how?

[bluestateguy]

18. Post #17

nt

[Brazenly Liberal]

21. That idea occurred to me, too, and I just figured out what's wrong with it.

Let's say the gov't gives me a debit card with $1000 on it. If I am squirreling away my $$ in a sock because I don't trust the banks and I'm worried about job security, I'd take that debit card and use it to buy daily necessities and then squirrel away the cash I would have spent on TP and gas and vet bills, etc. My sock would be $1000 richer, but no additional money would go into the economy.

[LiberalEsto]

22. Savings?

What savings?

[sandnsea]

25. Except 5% isn't "piling up"

It's half what it was in the 60s. People don't have any disposable income. People have been living on credit and they aren't using credit anymore. That's the problem and it can only be fixed with pay raises.

[patrice]

10. Yeah. I bought 4 GOOD tickets to Neil Young for Nov 4 '08; he cancelled. Now he's re-scheduled

but I ain't goin' :cry: Where's my "big girl panties"? :cry:

[OwnedByFerrets]

15. Amen to that!!!

[brer cat]

19. Save it or spend it?

I'm getting a nice tax refund which is going to pay off some bills, the remainder going into savings. Hypothetically...which is better for the economy...spend it or save it?

[sandnsea]

24. Savings was at 10% from the 60s to 80s

We ought to easily be able to save 5% and have no impact on the consumer economy at all.

[Life Long Dem]

26. Seems no one takes into account the risk of job hopping in this economy.

I'd take into account, the one's who are not about to rock the boat by starting out fresh with a new job.

[Juche]

29. It is also the loss of assets

Alot of people have seen their 401k and house equity cut by 30% or more. So it is hard to buy a $500 TV when you feel you have just lost $200,000 worth of home equity and retirement savings.

[phantom power]

30. Deflationary Spiral.

[Danascot]

32. Fear Itself

The American consumer is tapped out and paralyzed with fear for their futures. The longer the recession/depression is allowed to go on, the more entrenched this fear will become and the more difficult it will be to convince people that times are getting better, and the more difficult it will be to restart the engine of consumerism. The Japanese have held personal spending in check for almost 20 years. The children of the US depression have been frugal for 50 years or more.

Since the American consumer has been sidelined, most economists agree that government spending and financial intervention in the credit and banking system is necessary to get the economy moving again.

So far neither the stimulus nor the bank bailout have been big enough or bold enough to slow the freefall of the US economy. The recession has already lasted longer than a year, and the recognition of the crisis that began in September has lasted four months, an eternity for the short attention span of the American public. The last four months have been a barrage of stunningly bad news for anyone who has been paying attention. Moreover, the prognosis for the future is filled with dire predictions of more job losses, cut-backs and failures in the retail, manufacturing, service, financial and every other sector of the economy. It’s no wonder people are terrified.

The problem is that the American consumer won’t be convinced that things will get better until effective measures are in place and those measures are producing convincing evidence that they are working. The longer the problem is left unaddressed, the more difficult it will be to convince them. Without the American consumer there will be no recovery.

http://www.crashsurvivalzone.com/fear-itself/

[Tierra_y_Libertad]

34. The bankers and politicians are counting on Americans to be stupid.

Fortunately, even stupid people know when they're broke and likely to be even more broke.

[rucky]

35. And creditors are getting more aggressive.

Leading to a cashflow burden that's hard to recover from when your $200 gas bill is now due before your next pay period, so you have to eat a late fee on top of that.

[bridgit]

36. Correct. And that's only part of why America is more conservative...

than many are prepared to admit, we did the same thing after 9/11 and I was glad to see it; glad to see we clamped it down so hard bush had to come out and beg people to go shopping. This *is* our economy, they only think it's their's. And if our leaders won't lead we still have initiative & options and I include boycotts among them

[AZ Criminal JD]

38. Americans are spending

I was at two malls over the weekend and it was difficult to find a parking space even though the parking areas are gigantic.

[EstimatedProphet]

39. Or maybe because they've already lost their jobs

I'm unemployed as of next Thursday.

[HughBeaumont]

40. Firing Freeze.

It needs to happen.

We cannot make the first move. Corporations have to. If a recovery is ever going to happen, they have to make the first move.

[reggie the dog]

41. invest in objects of value

cannabis, cocaine and heroin, while illegal, will probably hold their value better than most anything else......

[Arkansas Granny]

42. My job is pretty secure, but I've cut back on spending just in case

my kids aren't so lucky. If they need it, I want to be in a position to help.

[n2doc]

43. Tony Auth sums it up well:

[sarcasmo]

44. Scared Shitless, well said.