Thursday, December 20, 2012

Is it any wonder...

This morning while browsing through the channels when I came across Carol Roth, speaking on Fox Business News where she was talking about the reasons why the economic recovery is still tepid.  I am paraphrasing a bit as I did not rewind the clip to make note of the exact wording but I believe it is fairly close.
"Amercian consumers have a lot of credit available.  They have been deleveraging and their home values have been increasing.  It is the uncertainty about the future that is keeping them from using it to get the economy moving again."
Firstly, I would argue that it isn't consumption that ultimately drives the economy, but rather production which is increased via savings and investment.  Production has to come first or their is nothing to consume.

Secondly,  are we really to believe that to get the economy moving, we should just be going out and spending as much as we can, even if we have to max out the limits on our credit cards and mortgage our homes to the hilt?  This is like the old joke that goes "I can't be broke, I still have checks!"

If this is the advice that the financial "experts" are giving to the government, is it really any wonder why they have run up a $16,000,000,0000,000 debt?

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