The Future Is Deflation • The economy is headed for a protracted slowdown with persistent high unemployment and growing social unrest.There should be a modest uptick in GDP in either in the 4th quarter 2009 or the 1st quarter 2010. This will mark the end of the current 20 month-long recession, but not the end of the crisis. The blip in growth doesn’t mean that the troubles are over or that the economy is on the way to recovery. It simply means that Obama’s $787 billion fiscal stimulus is beginning to kick in, giving a boost to consumer spending and generating short-term economic activity. Regrettably, when the stimulus runs out, the economy will slide back into negative territory. That’s because the US consumer has crossed an important threshold and no longer has the ability to drive the economy through debt-fueled consumption. The data indicates a critical change in consumer behavior which portends a shift away from the current model for economic growth. It’s a whole new ballgame. Mike Whitney Counterpunch
2 comments:
Most of us need look no further than our own personal finances to realize how the American "consumer" has changed. Most of my friends and I spent a lot of home equity between 2001 and 2007. Luckily, I used mine to upgrade the house, not buy vehicles. Most of my boys bought Lexuses. Now, they are holding onto jobs for their dear lives and not spending A DIME. When a dude like Big Wayne starts talking about saving money, you know the economy is bad.
arithmetic, population, and energy.....,
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