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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: quehubo who wrote (113584)	6/17/2009 9:44:52 PM
From: Mary Cluney	Respond to of 541791

<<<We have 25 years of overconsumption, households need to pay down their debt. >>> The last 20 years have been really, really good for the top 20% of the economic ladder. Currently the official unemployment rate is around 10% but the real unemployment rate is closer to 16/17%. Add to this the underemployed. Most American's are struggling to make ends meet. Further contraction will mean more unemployment, homelessness, and difficulties for most American's to make ends meet. As things are, the picture is not pretty but a depression (20/25% unemployment) will be really ugly.

To: quehubo who wrote (113584)	6/18/2009 10:28:14 AM
From: Steve Lokness	Read Replies (1) \| Respond to of 541791

We have 25 years of overconsumption, households need to pay down their debt. Households have more pressing needs that stimulating the economy with more purchases at Best Buy. Bingo! .....Sorry to go back to the example of Krugman in 2002 but it is very revealing to do so; Krugman said then that the consumer had to increase their consumption subtantially to pick up for a lack of business spending. The consumer did that in part by using increased home prices and the equity that created to use their home as an ATM machine. That increased debt of course furthered the creation of the bubble. ........Now they want to keep the economy going by spurring spending again. Business isn't going to spend, the public can't - so that leaves only the government as a last resort. But the government is us. Soooo, as you so clearly point out once again we are overconsuming. Time - we need time. But then you have that catch 22! steve