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Well, as I said in a previous reply to one of your posts, a corporate-led recovery is STILL a recovery.
In regards to retail sales. Here's a chart of retail sales over the last few years. It does not include the latest (May numbers) - which of course showed a drop (due mostly to a drop off in building materials sales, car sales and gasoline (which was probably ENTIRELY due to lower prices)) but still the trend in retail sales is very very clear - they have rebounded considerably.
Ken
I agree, a corporate led recovery is something. But one has to look at the corporation..it is a multi-national where the money is leaving our shores ?
Domestic is very anemic and tepid at best. I think the MSM just pumps too much rah-rah into the numbers when they show a slight increase.
At this point in time..stagnant and just skirting along the bottom should be taken as good news. Not good for government revenue though.
I wonder if this is the start of the double dip. Not good news at all.
It may be.
Here's the problem, people - we're in a Catch 22 situation where we're screwed if we don't deficit spend and we're screwed if we do.
When the private sector is falling apart, government spending does become crucial to keeping a bad recession from becoming much worse. If the government sat back and did nothing, we could be at a much lower long-term economic equilibrium that is then self-reinforcing and harder to get out of.
But at the same time, too much debt obviously is a key driver behind this whole global problem. And going too far with it means you end up like Greece = not good.
So I don't know what we're going to do. If we spend more now to try to keep things from really falling apart, then we face a bigger future deficit. If we cut all public spending like Republicans seem to want to do, then we'll watch things basically really stay in the crapper for just as long if not longer.
Nope - just too busy working on my house these days to waste a lot of time on this board.
Retail sales fell from the month before to be sure, but were still UP 6.9% from May of last year. Not only that, but consumer sentiment is at it's highest level in 2 1/2 years - which generally bodes well for UPCOMING consumer sales. All in all, not really bad news.
Post 23 is right, the internantional money powers are backed in a corner so to speak and a major downturn is coming. There is another option though but that would only benefit the majority of people instead of the internantial moneyed elite. People need to prepare for a major decline in their standard of living going forward.
So I don't know what we're going to do. If we spend more now to try to keep things from really falling apart, then we face a bigger future deficit. If we cut all public spending like Republicans seem to want to do, then we'll watch things basically really stay in the crapper for just as long if not longer.
We've spent enough already - $1+ trillion for the stimulus that failed to live up to expectations.
At some point the government needs to stop meddling and let the chips fall where they may.
And the whole point of them meddling, which makes matters worse, is a political one.
The party in power wants to keep the power and they will do whatever is necessary to hand out the free goodies, but they're really not free, are they?
Quote:
People need to prepare for a major decline in their standard of living going forward.
They are doing just that - by not spending.
Without consumer spending, we are in for a tough haul.
We've spent enough already - $1+ trillion for the stimulus that failed to live up to expectations.
I agree, it has not lived up to expectations. But read this for a neat perspective on realistic expectations for the stimulus - it's a response to an NY Times article:
The stimulus was scored at $787 billion. However, roughly $80 billion was a fix to the alternative minimum tax. This is done every year. Since no one ever expected to pay this tax, making this fix could not provide any stimulus to the economy. Roughly $100 billion was projected to be spent in 2011 or later, leaving $600 billion for 2009 and 2010, or $300 billion a year.
If we want to see the net stimulus from the government sector we also have to factor in the cutbacks from the state and local governments. These came to around $150 billion a year, leaving a net stimulus from the government sector of about $150 billion annually, or a bit more than 1 percent of GDP.
This boost from the government sector must counteract the impact of a falloff in annual construction spending (residential and non-residential) of more than $500 billion a year and a comparably sized reduction in annual consumption.
So really, many economists were probably correct in saying that the stimulus is not large enough to do the job until the consumer revives - the problem is that it can't get much larger because we couldn't afford to put on much more.
Quote:
Originally Posted by sanrene
At some point the government needs to stop meddling and let the chips fall where they may.
Without consumer spending, we are in for a tough haul.
I don't disagree with you - just recognize that even when they stop meddling after the next election, it's not going to be the silver bullet that is going to make things quickly get better and bring back the consumer.
We've spent enough already - $1+ trillion for the stimulus that failed to live up to expectations.
At some point the government needs to stop meddling and let the chips fall where they may.
And the whole point of them meddling, which makes matters worse, is a political one.
The party in power wants to keep the power and they will do whatever is necessary to hand out the free goodies, but they're really not free, are they?
They are doing just that - by not spending.
Without consumer spending, we are in for a tough haul.
Unfortunately in this debt money system, they simply can not cut spending or else it all collapses. But if they do keep spending which means adding new debt which now at this level of debt subtracts from future growth, either way it will still collapse guaranteed. Sort of a dammed if you do or dammed if you don't situation. There are other options but the powers that be would resist them losing control of the money system which only benefits them. This will end badly without a doubt.
Furthermore - as I already mentioned, the retail sale drop that is the subject of this thread is really pretty concentrated into a few select areas - and largely reflects LOWER PRICES (especially in regards to gas sales) rather than a decrease in actual purchases.
Digging into the numbers, there are signs that the 1.2 percent decline was very narrowly concentrated in autos, gasoline and building materials, said Nomura Securities Chief Economist David Resler, in a research note. And, he notes, in some cases the declines represents lower prices rather than fewer consumers making purchases. "We believe the report was much more positive than the headline figures suggest," Resler said.
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