More Spending Won't Solve the Problem of Too Much Spending
Increased consumer spending doesn't mean the economy's going to be great. All it does is show us increased economic today. It doesn't tell us we can expect things to get better.
In that light, cranked about the Black Friday reports of increased spending by consumers a while back. It turns out Caroline Baum agrees with me. For those of you who don't know Ms. Baum, she's a sharp cookie who writes a regular column for Bloomberg.com. Her latest expands on my Black Friday rant. In fact, she also agrees with my remark about the unseemly nature of such spending, saying "there is something fundamentally wrong with a culture that promotes spending as the key to health and wealth."
Look at it this way. Do you think spending - the thing that got us into this mess - will get us out of this mess? If you do, you should get a job in government or go work for the Fed. They're using more debt to solve the problem of us having too much debt. Or, if you prefer an international lifestyle, go work for a European government or the European Central Bank. They're doing the same.
Where does it all end? Well, the betting seems to be that it doesn't have to end. Do you believe that? Are you willing to stake your future and the future well-being of your family on that? If so, just keep doing whatever it is you've been doing. No problem.
On the other hand, if you don't believe that spending more to solve a problem caused by too much spending, or running up more debt to solve the problems caused by too much debt will end any other way but badly, then you should be thinking about what you need to doing to protect yourself.
As for the economy, what we need isn't consumers buying tons Christmas presents. As Ms. Baum puts it, "the wealth of nations comes not from what we spend but from what we sow: what we set aside to be invested in productive capacity...Neither consumers nor governments can spend their way to prosperity."
Really, is this so hard to get? You didn't really think that a bunch of people running around spending their last dimes was going to make the world a more prosperous - never mind a better - place. Did you?
In that light, cranked about the Black Friday reports of increased spending by consumers a while back. It turns out Caroline Baum agrees with me. For those of you who don't know Ms. Baum, she's a sharp cookie who writes a regular column for Bloomberg.com. Her latest expands on my Black Friday rant. In fact, she also agrees with my remark about the unseemly nature of such spending, saying "there is something fundamentally wrong with a culture that promotes spending as the key to health and wealth."
Look at it this way. Do you think spending - the thing that got us into this mess - will get us out of this mess? If you do, you should get a job in government or go work for the Fed. They're using more debt to solve the problem of us having too much debt. Or, if you prefer an international lifestyle, go work for a European government or the European Central Bank. They're doing the same.
Where does it all end? Well, the betting seems to be that it doesn't have to end. Do you believe that? Are you willing to stake your future and the future well-being of your family on that? If so, just keep doing whatever it is you've been doing. No problem.
On the other hand, if you don't believe that spending more to solve a problem caused by too much spending, or running up more debt to solve the problems caused by too much debt will end any other way but badly, then you should be thinking about what you need to doing to protect yourself.
As for the economy, what we need isn't consumers buying tons Christmas presents. As Ms. Baum puts it, "the wealth of nations comes not from what we spend but from what we sow: what we set aside to be invested in productive capacity...Neither consumers nor governments can spend their way to prosperity."
Really, is this so hard to get? You didn't really think that a bunch of people running around spending their last dimes was going to make the world a more prosperous - never mind a better - place. Did you?
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