The Motley Fool Discussion Boards

Previous Page

CAPS / CAPS Blogs

URL:  https://boards.fool.com/declines-in-consumer-spending-dont-cause-33611978.aspx

Subject:  Re: More Tax Revenue Declines, Parabolic Gold Date:  3/13/2008  8:57 PM
Author:  FleaBagger Number:  35202 of 584

Declines in consumer spending don't cause recession. I know that sounds stupid because you hear all the time how we're going into a recession because of a lack of consumer spending, but I'm right. They do often coincide because they are both symptomatic of a decline in the productive labor. Productivity is up, you argue, but what productivity? Contractors for waste-of-space bureaucrats? That "productivity" doesn't produce anything, so it masks declines in wealth generation and fruitful employment, distorts the economy, and hides the fact that the current administration effectively (but not officially) increased nondefense gov't employment many times over.

So when we stop producing things people want, and start sorting mail for the welfare state, the country becomes poorer, and the statistics on employment and "productivity" stay the same or keep growing. Inflation erodes the purchasing power of stagnant wages, and consumer spending drops shortly after the country has become poorer by producing less wealth.

What's the difference? The difference is that if we all grew, made, or built good things and saved our money, we wouldn't be in a recession. Our economy would just be less oriented to shiny, pretty things like iPods.


Copyright 1996-2021 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us