Monday, November 16, 2009

Dont Spend : Are consumers driving us into Recession?

Are Consumers Driving Us into Recession?


by Llewellyn H. Rockwell, Jr.


by Llewellyn H. Rockwell, Jr.








DIGG THIS





With recession looming or already here, the time has arrived for finding scapegoats. Expect a long list of these. Here is the target of the day: tightfisted consumers. A decline in personal consumption, writes the New York Times, "would be the first since 1991, and it would almost certainly push the entire economy into a recession in the middle of an election year."





This recalls Bush's advice after 9-11, when he assumed the mantle of the nation's personal financial planner. He told everyone to go out and spend money so the economy could avoid recession. Even then, there was confusion about whether he was right or wrong. Some sensible voices pointed out that economic expansion is based not on spending but on capital expansion rooted in savings. That is to say, the only path to future prosperity is delaying current consumption in favor of future investment.





One only needs to think of the household budget here to see the point. If you are planning for the future for your family, what is the wisest course? Does one go into debt as much as possible, buy the largest house and the biggest car, throw lavish parties, hand out all existing liquid funds to friends and strangers? Based on the view that consumption is the way to avoid economic problems, this would indeed be the right course.





But this also defies everything we know about family finance. The path to a secure prosperity is delaying consumption. One should spend as little as possible and save as much as possible for the future, and let that money be used in the service of investments that yield a solid rate of return. Those who have chosen a different path now see the folly: they are being burned in the soft housing market, for example.





The lesson is also true for the nation at large, because the logic doesn't magically change when moving from the family budget to the national stage. Just because something involves "macroeconomics" doesn't mean that we should throw out all good sense. But that is precisely what people have done with regard to the economy, since J.M. Keynes somehow convinced the world that up is down and left is right.





In a recession or a crisis, the right approach for individuals is to save. So too for the national economy. A looming recession will prompt a pullback in consumer spending as a rational response to the perception of economic troubles. This action does not cause the economy to fall into recession any more than more spending can save it from recession. The downturn is a fact that cannot be avoided. We don't blame umbrellas for floods, and, in the same way, we shouldn't blame tightfisted consumers for recessions.





There is no question that this is what is happening. American Express reports that the rate of spending by its cardholders fell 4% in December. Surveys of consumer satisfaction with the economy report a 15-year low. Retailers report that December was a "bloodbath" (NYT's words) for them, with sales growing at the slowest rate in seven years. Market watchers are mostly concerned that high-income buyers are bailing out.





Again, it is critical to keep cause and effect in mind. The pullback on spending is not going to cause a recession. If we think about the long term, this is not a dangerous trend but a hopeful one. The more people pull back and save, the more the foundation is laid for a recovery after the current correction takes its course.





To see that requires that we take a long view. Government, however, seems constitutionally incapable of seeing the long term, much less doing the right thing to prepare for it. Making matters worse, this is that dreaded event called an election year. Prettying things up to make the economy palatable to voters is priority number one.





What does this mean? More monetary expansion. More government spending. We can fully expect that the Bush administration could resort to its old program of sending checks out to every American family with the proviso that the money has to be spent, not saved.





No doubt that many people would be thrilled by this. But look beneath the surface. Government has no money to spend on anything that it doesn't extract from the pockets of you and me and the whole American public. This is easy enough to see concerning taxes. It is not so easy to see when the government runs up debt that is guaranteed by the printing presses.





The monetary issue can be understood by analogy to orange juice. The more water you add, the less substance it has. If you keep adding, eventually you come to the point when you can no longer tell that it was ever orange. This is the same with money. If you print enough – literally or electronically through the credit markets – it will continue to lose value. If money grew on trees, it would be about as valuable as autumn leaves.





So long as we have a central bank, government will be tempted to take the easy path of easy money. There do not need to be any secret phone calls from the White House to the Fed. The culture of policymaking itself is capable of broadcasting the right signals to all important players.





In any case, it is a myth that the Fed makes policy independent of political pressure. It is subject to the screams and hollers for looser credit in the same way that bureaucracies are responsive to demands for more regulation. It is what it is most suited to do in any case.





Yes, government can increase consumption, but by doing so it does nothing to care for the long term. The long-term health of a nation is not different from that of a household budget. Tough times require cutbacks and a beefing up of savings.





So let's not demonize the consuming public for doing what it should be doing. It's a good rule of thumb that when the government tells you to spend money, close your wallet.

Dont Spend : Are consumers driving us into Recession?
Yes. Ironically, since the beginning of the Federal Reserve, the insane economics of these days is that debt creates money. The more debt created, the more money issued and in circulation. So, not only would politicians who want their administration to look good want us to spend more, they would want us to go into debt, borrow, to do it.





Here's Paul Grignon's informative and easy to understand cartoon video on the process.


http://video.google.com/videoplay?docid=...


http://www.moneyasdebt.net/





The pathetic, gross and unbridled materialism that this policy encourages is sick and sickens everyone and the society. And, now it is sickening the world economy.
Reply:No. The Politicians who keep telling us to "Spend..."- are. Thanks to the Current President's insistance that we "spend our way out of Economic Difficulty", -we're up to our eye-balls in Credit Card Debt, have no Savings to speak of, and are running out of hours in the day- to Work long enough to pay for all our bad spending habits! It's Time we elected people who know what they are DOING with the Money we pay in Taxes- so WE don't have to go Bankrupt trying to keep THEM in Office!!! :0
Reply:ummm,


is this your homework or research paper?





if so





thumbs up!
Reply:You got some of the more interesting questions on this site.And some good answers,


Two of the best sites that re-enforce what you are saying are.


http://mwhodges.home.att.net/state_local...





http://www.georgereisman.com/blog/





You sound like you care about what is going on and if you read George Reisman He gives long answers but I have not been able to find any flaws in them, and they go along with all your questions.
Reply:Well said...and how many millions per day is this stupid-none-of-our-business war costing us...??? So much for spending our way out of this mess.


Is there a terrorist under your bed and behind the trees?

Because it seems to me people are living in fear, and even cling to some sort of invasion. What don't they know about our war-machine, and power? Some will say that Binladdin hit us without a 460 billion dollar war machine, but in reality he caught us sleeping and gave us a black-eye. Not to make light of 9/11 but Binladdin is dead and the Middle East has paid a heavy toll for being Muslim like him. Who says he's dead I DO, with an ego like his don't you think he would have starred on Allah-jazira with TODAYS paper a drink w/ umbrella, a couple of american porn stars and a cool smile. Oh you say he could be hiding real well, well then lets let him poke his head back up and sick our 460 billion $ war-machine back on him, maybe will get some ball-park coordinance. Or do you sheeple think were closing in on his GHOST.

Is there a terrorist under your bed and behind the trees?
Get a copy of this book: "Milestones" by Seyyid Qutb. Read it. It's only 160 pages long. It is to the "hirabah" (terrorists) of Al Queda and other like organizations, what "Mein Kampf" was to the Nazis. Then think of a number. That is the number of western-educated sons of well-off couples from the Islamic Crescent and South Asia who are the "educated unemployed" because there is no career path in their native countries to match their university training. They are the prime recruit base for Al Queda and the others.


The hirabah are serious. They are fixated. They are dedicated to their task of attacking any and all in the Jahili world who stand against them. They even adhere to the doctrine of "Takfir" which says it is O.K., in the conducting of this Jihad, for Muslim to kill Muslim.


When you have done this, try and find a pen pal in Israel who has had to live with the daily reality of hirabah attacks.
Reply:Nope but there are many all around the world and ignoring them won't make the situation any better- in fact it was the lack of response to their many attacks that showed Bin LAden that he could attack and defeat the US- he said this in a 1999 interview with ABC
Reply:whats your question?


Is there a terrorist under your bed and behind the trees?

Because it seems to me people are living in fear, and even cling to some sort of invasion. What don't they know about our war-machine, and power? Some will say that Binladdin hit us without a 460 billion dollar war machine, but in reality he caught us sleeping and gave us a black-eye. Not to make light of 9/11 but Binladdin is dead and the Middle East has paid a heavy toll for being Muslim like him. Who says he's dead I DO, with an ego like his don't you think he would have starred on Allah-jazira with TODAYS paper a drink w/ umbrella, a couple of american porn stars and a cool smile. Oh you say he could be hiding real well, well then lets let him poke his head back up and sick our 460 billion $ war-machine back on him, maybe will get some ball-park coordinance. Or do you sheeple think were closing in on his GHOST.

Is there a terrorist under your bed and behind the trees?
I would certainly hope NOT !!!!! And by the way, Osama bin Laden is NOT DEAD- if that were true, then WHY DOES he keep appearing in videos, where he obviously is ALIVE and well??





I don't understand the rest of this question, or should I say rant.
Reply:Hmmm tell that to the victims of 9/11.





You seem to forget we were attacked on our soil, unprovoked. If we left it to Gore or Kerry, we would be under radical islamic control by now.
Reply:This is what Republicans want you believe.
Reply:Yes; fortunately I have a nuclear arsenal in my closet, courtesy of Iran.
Reply:Reality Check: You failed!
Reply:Looks like a huge incoherent rant by a 12 year old on meth.
Reply:YES.....His name is Obama.
Reply:I don't understand who you are talking to that acts this way. You, not terrorists, are scaring me.
Reply:there's a terrorist in my pants
Reply:Obama doesn't sleep under my bed.
Reply:No there is not but maybe you should check Al Jazeera


today. there is an announcement
Reply:Actually, there are what many would call terror like folks around and about.





Consider the millions of illegals who steal into our land and take our jobs, ravage our system in any number of ways, including degrading our education system by mandating they be taught to speak English. In the meantime we dial ONE to get English so they can dial THEIR number.





Sounds and feels to ME like the USA HAS BEEN invaded and IS being terrorized.





Add to that, that on the MEXICAN side of the border, there is rampant killing and horrific tortuous ways of that killing in some cases. Wonder upon wonder ...they cut off their victims heads! Kinda like the Mid. East guys, yes?





They are killing Mexican government officials, closing down police departments and RUNNING DRUGS and PEOPLE into the USA!





Perhaps I'm just paranoid as you suggest ...but it looks, feels and quacks ...LIKE TERRORISM to me.





BinBADman is not our biggest problem, dead or alive.
Reply:No the terrorists are living right next door. They have been there for years, they just haven't acted yet. All those years of naivety, believing that bad people don't exist are going to finally catch up to us. Much like they did on 9-11.





Bin Laden is not a terrorist. He is a figure head, a spokes person, a leader. He would never go out a fight himself.





And if Obama gets elected there will be more moving in next door. After all he wants to sit down and talk with them without any conditions applied.





One question, if Police Chiefs sat down with known rapists, murderers, and drug dealers and had coffee and tea, and did not arrest these known criminals, would they be incompetent or more important ineffective at enforcing the Law. On the same note, we lose police officers everyday in the line of duty. Should we just stop enforcing the laws because we have lost too many cops. After all that is what people want to happen in Iraq/Afghanistan. Liberals scream about the deaths of men and women that chose to serve and get paid to place their lives on the line when asked too.
Reply:Believe he is long dead and got killed in Tora Bora





Those tapes that show up once in awhile are put out at the strangest times....ie; when Bush visits Israel recently then nothing





With Scott the Bad news bear book was reported yesterday to come out on Monday....see how bad Bush screwed up and all the lies come out because of it.....





Suddenly there is new Al-queda tapes SOON to be out and in them suppose to threaten with weapons of mass D





Yeah they are real and hiding among the masses...in little groups and why it will be never-ending and fact of life in this century

Taxes

Is there a terrorist under your bed and behind the trees?

Because it seems to me people are living in fear, and even cling to some sort of invasion. What don't they know about our war-machine, and power? Some will say that Binladdin hit us without a 460 billion dollar war machine, but in reality he caught us sleeping and gave us a black-eye. Not to make light of 9/11 but Binladdin is dead and the Middle East has paid a heavy toll for being Muslim like him. Who says he's dead I DO, with an ego like his don't you think he would have starred on Allah-jazira with TODAYS paper a drink w/ umbrella, a couple of american porn stars and a cool smile. Oh you say he could be hiding real well, well then lets let him poke his head back up and sick our 460 billion $ war-machine back on him, maybe will get some ball-park coordinance. Or do you sheeple think were closing in on his GHOST.

Is there a terrorist under your bed and behind the trees?
Not afraid of terrorism.


Our 460 billion dollar war machine is making us broke. Now that scares me. We don't tax for it, we just print more money which devalues our dollar.
Reply:Doubtful-
Reply:No. I just checked.


So Cool or No Cool?

Tom Cruise- So Cool or No Cool?


Crocs- So Cool or No Cool?


Krumping- So Cool or No Cool?


Cooking Shows- So Cool or No Cool?


Kittens- So Cool or No Cool?


Trees- So Cool or No Cool?


Hannah Montana- So Cool or No Cool?


Horses- So Cool or No Cool?


Umbrella (by Rihanna)- So Cool or No Cool?


Titanic (movie)- So Cool or No Cool?


ME- So Cool or No Cool?

So Cool or No Cool?
Tom Cruise- So Cool


Crocs- No Cool


Krumping- No Cool


Cooking Shows- So Cool


Kittens- No Cool


Trees- So Cool


Hannah Montana- No Cool?


Horses- No Cool?


Umbrella (by Rihanna)- So Cool


Titanic (movie)- So Cool


ME- So Cool
Reply:No cool


No cool


No cool


No cool


hmmmm... cool.


So cool


so NOT cool


they hate me


Not Cool


Not COOL


depends what you would have voted for these....
Reply:Tom Cruise-No Cool


Crocs-So Cool


Krumping-What is that?


Cooking Shows-No cool (there is just to many!)


Kittens-So cool


Trees-SO COOL!!!!!!


Hannah Montana-No Cool (never ever!)


Horses-So cool


Umbrella (by Rihanna)-No cool


Titanic (movie)-So cool


ME (me or you)-We're both so cool
Reply:Tom Cruise- No Cool


Crocs- No Cool


Krumping- So Cool


Cooking Shows- No Cool


Kittens- So Cool


Trees- No Cool


Hannah Montana- No Cool


Horses- So Cool


Umbrella (by Rihanna)- So Cool


Titanic (movie)- So Cool


U- So Cool
Reply:Tom Cruise- No Cool


Crocs- So Cool


Krumping- So Cool (dont really know whta it is)


Cooking Shows- So Cool


Kittens- No Cool


Trees- So Cool


Hannah Montana- No Cool


Horses- So Cool


Umbrella (by Rihanna)- So Cool


Titanic (movie)- No Cool?


ME- So Cool (super cool)
Reply:Tom Cruise- not cool


Crocs- not cool


Krumping- so cool


Cooking Shows- not cool


Kittens- soo cool


Trees- soo cool


Hannah Montana- not cool


Horses- soo cool


Umbrella (by Rihanna)- soo cool


Titanic (movie)- soo cool


ME- idk ill say soo cool


Wild ideas to combat global warming being seriously entertained , come see what they are .?

Crazy-sounding ideas for saving the planet are getting a serious look from top scientists, a sign of their fears about global warming.





How crazy?





There's the man-made volcano that shoots gigatons of sulfur high into the air. The space "sun shade" made of trillions of little reflectors between Earth and sun, slightly lowering the planet's temperature. The forest of ugly artificial "trees" that suck carbon dioxide out of the air. And the "Geritol solution" in which iron dust is dumped into the ocean.





NASA is putting the finishing touches on a report summing up some of these ideas and has spent $75,000 to map out rough details of the sun-shade concept. One of the premier climate modeling centers in the United States, the National Center for Atmospheric Research, has spent the past six weeks running computer simulations of the man-made volcano scenario and will soon turn its attention to the space umbrella idea.





See link -http://www.chemtrails911.com/docs/-%2020...

Wild ideas to combat global warming being seriously entertained , come see what they are .?
well i think that we shouldn't deal with gobal warning after we cause it.. we should deal with it before.. instead of spending a lot of money on how to work with global warning we should work on how each person can help prevent it.. im not sure if that makes sense but yeah thats what i think... also there is such think as going to far.. would those things really work or are we wasting money? and can someone tell me why we spend so much money on getting aircrafts to space and far away planets and not focusing on whats happening on earth? well yeah iono..
Reply:Cheryl Crow called for limits on how many pieces of paper you can use to whipe.
Reply:should we really stop global warming? it is a natural cycle, not influenced by man. i hate to think what would happen if we stop the earth's natural cycles!! if we stop global warming on earth will we then stop it on Mars? Yes, Mars is having global warming, too. I suppose Miss Crow would assume someone there is using too much toilet paper.
Reply:man what a bargain only 75,000 thats 500,000 less than a single tomahawk missile. All the smart people are on Y answers too consumed with 15 second solutions to work on this.
Reply:I am working on a way to shoot all nuclear waste to the sun, so we can all enjoy nice clean nuclear energy.
Reply:lmao
Reply:My PC would not show the images and that's good enough for me. Duh!!
Reply:Humans are so fake.


How could we prevent being hit by lightning when it is raining and we are not inside a building?

E.g. Is it safe to stay under trees, or get in a car, or running, or just staying in the same place? Is it safe to speak on the mobile phone, or keep an umbrella, or keep in hands something made by steel? etc.

How could we prevent being hit by lightning when it is raining and we are not inside a building?
First, this question is in the wrong category.





Second, in some cases it is much safer to stand under a tree. For example, if you're out riding your bike in a forested area, it would be foolish for you to remain out in the open on the trail; get yourself into the trees.





However, if you're riding or walking through a field and there are few trees around, stay away from what trees there are and get on the ground to make yourself as low and as small as possible.





If you have access to an automobile, get inside. It's the safest place to be, aside from in a structure.





Holding any metal would be begging for death, so get away from your bike, your baseball bat, your golf clubs, your hunting rifle, etc.





Don't get on your cell phone. And if you're indoors, don't even get on a regular telephone, as a lightning strike to a phone line can travel through the line and into your phone and then into you.





Most important in all of this is to know when to get out of danger's way. Don't wait for the lightning. By then it may already bee too late. When you hear thunder is the time to seek safety.
Reply:no dont stand under trees...or hold umbrella...the best is to go next to a high buildin cos lightnin strikes wtever is highest or get inside a car but dont touch any metal...also u could crouch down in the ground in a kinda 'foetus' position with, i think, only ur toes touching the ground (if u hav rubber soles) ^_^
Reply:First off, never stand under a tree! Something tall like that will attract lightning. The best thing to do is get in a car.If lightning hits the car, the rubber tires will absorb the shock and no one will get hurt. I don't know about talking on the phone, I wouldn't do it but I'm not sure.Umbrellas wouldn't help, but probably wouldn't be unsafe.
Reply:It is perfectly safe to stand under a tree, You have the power of the Lord on your side. In fact, You can also hold a really long metal rod and point it at the sky and say "C'mon lightning, You can't touch me cause I'm a child of God." Trust me, you will be perfectly fine.

boots