GDP likely slowed without strong consumer spending
http://money.cnn.com/2012/07/25/news/economy/GDP-consumer-spending/index.htm?hpt=hp_t2
This is what happens when a strong (financially) government elects to engage in austerity during an economic downturn. The downturn goes on and on and on and on and growth, if there is any measurable, is anemic. The article mentions the chicken-and-egg issue of poor consumer spending keeping wages and jobs down leading to poor consumer spending, round and round she goes. To me the obvious solution is to take the investor dollars being pushed on us (on the U.S., of course, no one wants to give money to ordinary people!) at such low rates that it is below inflation and spend it on fixing our dilapidated infrastructure. That not only provides a HUGE tangible investment (irrespective of any inevitable growth in tax revenues which would likely trivially be able to pay the loans back) with a payback going decades into the future, but it gives a huge shot in the arm to our economy by reducing unemployment and increasing average wages, thus providing the kick to consumer spending that would reverse this negative spiral.
Of course, since we don’t have any economists in our government (just con-artists with law degrees (yet have never even been lawyers in most cases!)) and nearly all are elected by tiny groups of people that are often living in fantasies, instead we have gridlock and dangerous, idiotic games with shutting down government or threatening to stop paying our bills.
I am not sure why I wrote this post, just thinking about the subject makes me depressed and hopeless…
