It's working

Russell Turpin deafbox@hotmail.com
Tue, 16 Oct 2001 18:20:32 +0000


Sateesh Narahani writes:
>Spend, spend, spend, if there is any better time to spend money, it is now, 
>I think. It is the good way of saying Thanks to american economy that has 
>given us good life so far. Spend atleast 10% more than we normally spend.

Hmmm. Narahani is recommending that people do something
that may be unwise for their own financial wellbeing.
The prudent reaction to increased job uncertainty, and
potentially lower income, is to tighten the belt.

There is a larger issue. Up until now, Americans have
been spending at a high rate. Consumer debt is high, so
high that it may be the thing that triggers the
recessionary spiral. Here's a current article on the
issue:

http://abcnews.go.com/sections/business/DailyNews/debt_crunch_011015.html

We may soon suffer the consequence of people overspending
for the past decade. If we do, they won't be able to spend
then, because their creditors will close the valve. Is
more consumer spending *now* going to fix more problems
than it causes? Or will it accelerate a national credit
crunch?

Russell


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