4 ms·
To OP: That does not make a compelling argument that the stock market rally will continue. Consumer spending is 70% of the U.S. economy. And we have an unempl
by jdkee 6y ago
To OP:
That does not make a compelling argument that the stock market rally will continue.
Consumer spending is 70% of the U.S. economy. And we have an unemployment rate of over 15% on its way to 20%, the worst in 80+ years. We are seeing many areas of consumer spending rapidly decline if not stop altogether. Delinquencies in mortgages, car loans and credit are expected to skyrocket.
Also, the wealthy have a lower marginal propensity to consume. Giving $1200 to a worked making $40,000/year almost guarantees every dollar will be recycled into the economy. Give the same stimulus to a millionaire and you have savings or asset inflation.
- paulpauper 6y agoperhaps a lower marginal propensity to consume, but bigger purchases make up for it. A millionaire remodeling his home for example or buying a Tesla.
- redisman 6y agoThey obviously don’t or there wouldn’t be any billionaires. An American family earning 40k is guaranteed to spend it all on food, shelter, healthcare and a few other consumer goods. An American billionaire by definition is not using their billions to consume or they wouldn’t have billions in their portfolio anymore. Jeff Bezos might buy a Tesla but he’s not buying a million Teslas