“Consumer spending accounts for about two-thirds of total spending in the economy. If the level of consumer spending is high, the economy will experience high levels of production and employment; the economy will be booming. On the other hand, if the level of consumer spending declines, the level of production and employment will decline; the economy will be in the doldrums. According to Keynesian theory, the most important determinant of consumer spending is the level of disposable income of households. Important non-income factors that affect consumer spending include consumer expectations, the level of consumer indebtedness, and the wealth of households.”
If we are a nation, and not just people living within close proximity to one another, then to me, that implies a certain amount of unity – a family in the loose sense. The reason for government, it seems, would be to ensure that there is a system for all, and that the system works for the people – all of the people.
The situation that we are in today, is the result of an economic system. I am assuming that ‘free enterprise’ is free within the boundaries of some general economic system in place to prevent the bankruptcy of the nation. However, I have to say that I am absolutely amazed that no one involved in the ‘system’ that we have here in this country saw this coming. I really mean amazed, shocked, astounded – because I can’t see how our ‘system’ as it is, could ever be expected to work. It seems to me, that it doesn’t even work in theory.
It’s like a monopoly game where one player has managed to buy all of the hotels. Now, since that player owns all of the hotels, he now decides to raise the rates to an exorbitant amount. It doesn’t take very long before the only player with any money is the one who owns the hotels. Unless he now plays with himself and pays himself to stay in his hotels – the game is over.
I remember after about the first year after we declared victory in Iraq I read an article by a man who said that he witnessed the ‘war games’, that generally precede a war. In these games he said that all different scenarios are usually played out in order to understand what we are getting into and how we will get out of it. He said that the problem with these particular games was that there were no real scenarios played out. All possible outcomes of each action were not played out. In other words, we were unprepared because we were not willing to risk the possibility that this could not be a wise move.
So, I’m wondering, when all of this deregulation was pursued with such enthusiasm and gusto, and all of these protections were set in place to protect big business, did the heads of the government in charge of finances and whatever economic ‘system’ we have in place, map out the possible direction that these new ‘systems’ could take us? Because it seems to me that this was much worse than looking at the patriotism, and self-restraint of corporate America through rose colored glasses. It seems to me, that it was something like taking a bunch of junkies and letting them loose in a heroine den saying only, “We trust you to show restraint”. Yeah, right, that works. I don’t understand how a government that felt it necessary to create a ‘minimum wage’, however minuscule that minimum is, did so because it realized that greed could not be self-regulated.
Of course, being on the bottom end of the bottom that is falling out, this situation that we are in is a bit troubling to me. Still, what I find the most difficult to understand is that it was allowed to happen. If this is a consumer driven economy, it seems to me that until the consumers can find jobs, affordable healthcare, and then find their way out of debt, then, and only then – at some distant time in the future, one that seems far far away will we once again have the disposable income to again drive the economy. I only hope that while most of us are too poor today to even drive our cars – let alone drive an economy, the government figures out that giving money to the companies whose addiction to wealth and power put us into this mess, expecting them to then turn around and make things all better is like giving a junkie the cash to repay the mortgage he took out to buy his drugs.