Quote:
Originally Posted by Barry-xlovecam
A lot of consumer spending was fueled by mortgage refinancing proceeds.
Property is worth substantially less now.
This would apply to big ticket items, durable consumer goods, cars, appliances, furnishings ...
People still buy necessities like food, medicine, clothing etc ...
The unemployment is certainly a factor.
People also feel poorer, their retirement accounts, if stock based, are worth considerably less.
Also, inflation based cost of living increases are non existent now, there has been little inflation officially to cause wage rates and social security payments to increase.
Bottom line — there is less spendable income today — a perfect storm. |
good post....
credit fueled unsustainable growth...
when the credit dried up, so did the spending..
people only tend to look at consumer credit, but the fact is that business credit has dried up as well and companies are having a hard time getting the credit they would normally use to weather economic storms..
on top of that, productivity is up because fewer people are doing the same amount of work that two or three people used to..
i attribute this to people working harder so they can keep their jobs..
the perfect storm has been brewing for years and a lot of this can be blamed on US companies sending jobs and manufacturing overseas...
unless some major changes are implemented and implemented quicky, this recession could last for decades...
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