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Profligate spending has been good for the consumption based economy, and bad for the vast majority of Americans who lack rainy day savings. Let alone something
by cmurf 6y ago
Profligate spending has been good for the consumption based economy, and bad for the vast majority of Americans who lack rainy day savings. Let alone something more serious.
If self-reliance and personal fiscal responsibility is a "threat to the economy" then the economy is part of the problem.
- wwweston 6y agoWe've gotten efficient enough of producing the basics that we don't need everyone or maybe even half of the available labor market to do it. That means either a good chunk of people have to be employed doing stuff driven by unnecessary spending, or they don't have employment. And we aren't great at distributing necessities to those who don't have employment. You could say the economy is part of the problem. Or you could just say demand drives employment, which means when demand for non-necessities drops, so does employment.
- bobthepanda 6y agoDemand doesn't necessarily have to be US demand, though. For the past few decades US consumer demand has done a lot of heavy lifting for the global economy. Why can't more of this come from other big markets like Germany or China?
- 411111111111111 6y agoThe only product the USA produces inside its borders that's actually in demand globally is culture (movies, tv shows etc).
- tonyedgecombe 6y agoand software (Google, Microsoft, Facebook, etc).
- 411111111111111 6y agoI'd consider them multinational at best. They'll stop targeting USA first as soon as it's more profitable to do so. They did start there though, that's for sure!
- redis_mlc 6y agoBoeing was the USA's largest exporter, until they forgot that the aerospace business requires, you know, aerospace engineering.
- mrscottson 6y agoYou forgot the USA's top major export...the dollar.
- 082349872349872 6y agoIf you want germans and chinese to import your production, you'll need to raise standards to meet theirs. For pork, this has already started happening: Hormel, JBS, and Tyson are no longer taking ractopamine-dosed hogs, even though they're still legal to sell to US consumers.
- mrscottson 6y agoChlorinated chicken is banned in many countries like the UK also..., we have to step up our food and food prep regulations to compete in those lucrative markets.
- bobthepanda 6y agoTo be quite clear, I'm not saying that only US goods need to be bought by Germans and Chinese. Those consumers are generally thrifty overall relative to their share of the global economy, and a global economy based on one country's consumer demand is simply not going to be a healthy one. High German savings was one of the things that led to the Euro crisis, since you cannot simultaneously run trade surpluses with all your neighbors and then be surprised when they are running deficits as a result. In the same vein, Chinese over-saving has led to a domestic property bubble that is a house of cards waiting to fall apart once people can invest their savings in something that isn't an apartment. As far as your point about global goods, I don't think that China, a place where hundreds of thousands of infants were poisoned due to illegal substitutions in baby formula, and people get told to look for reused "gutter oil" in street food, has a leg to stand on when it comes to food safety.
- 082349872349872 6y agoYou can start shorting chinese real estate: I was just reading the other day that WTI going negative had badly burned many chinese retail investors. (as for germany, I'd call that an argument against currency unification ... but that's an entirely different thread) If a country saves too much forex, one can slap sanctions on them for being a "currency manipulator". If a firm saves too much cash on hand, one can find a corporate raider (which the germans and chinese also have) to make a hostile LBO. However, for thrifty households, there don't appear to be any similar sticks, only carrots. How would you propose to incentivise german and chinese households to consume more than they do?
- 082349872349872 6y agosee https://en.wikipedia.org/wiki/The_Space_Merchants https://en.wikipedia.org/wiki/The_Space_Merchants for a 1952 prediction of where "the consumption based economy" winds up. the original CNN article is not far removed from the initial attitude of the protagonist...