Consumers Drop the F-Bomb on Government Economists

September 12, 2010 by  
Filed under Economics

The consumer engine that drives our economy isn’t returning to its borrow and spend ways.

“F—you” say consumers who refuse to comply with the pleas of government economists that we revert to our bad habits of yesteryear.

This is most pleasing to Mr. ToughMoneyLove.

I love the headline of this article from CNN/Money:   Consumers Not Spending Like Drunken Sailors

We know who the drunken sailors are, don’t we? They work in Washington, D.C.  Well, they don’t actually “work” in the way that we do. They hire friends and family, forget to report income, hit-up donors for campaign contributions, and try to get on television. In between they pass stimulus bills to buy votes.

While consumer spending has not increased at a rate that the Obama team desires, the savings rate has increased. Yet no one in the Obama administration is calling for us to save more, are they? Another one-fingered salute for you, government planners!

Consumer borrowing fell in July for the sixth straight month.  Consumers are “deleveraging.” That’s not part of the government “return to economic glory” strategy either.

This reluctance to spend is not confined to the middle classes. High income households are also holding back on spending because of concerns about higher taxes.

Our bumbling leaders don’t know what to do with us. We are not following their lead by emptying our wallets.  And now they must focus on their most important job – getting re-elected. Unfortunately, they have nothing but sustained unemployment and extreme government deficits to show us.

Why are consumers collectively turning their backs and raising their middle fingers to government economists? Because we do not trust them. We do not believe that what began in late 2007 will not happen again – and again. Many of us have learned our lessons. But we don’t believe the government has.

We are doing our own thing. The government should listen to us and follow our lead. It should stop spending so much of our money. If and when it does, we will regain our confidence and ease back into a pattern of increased spending on our own. Then the economy can recover.

That’s my story and unless readers can convince me otherwise, I’m sticking to it.

Feed Mr. ToughMoneyLove

FREE UPDATES: If you enjoyed this, please subscribe to receive the newest hard truth from Mr. ToughMoneyLove automatically by RSS feed (what is RSS?) or by spam-free Email.

  • Banner


3 Responses to “Consumers Drop the F-Bomb on Government Economists”
  1. andyg8180 says:

    If no one is saving and no one is spending, then where is the money going? Thats one thing i cant understand when people speak on government. Is it going to only taxes? Is it going to pay off existing personal debts? Is it just magically disappearing since its not being spent/saved?

    I’m all for gov’t spending less, but someone needs clarification of whether we are not saving or not spending… To me, there is no middle.

  2. MasterPo says:

    Money is being spent, but only on daily living expenses (i.e. household products and services – food, clothing, medicine, repairs/maintenance, utilities, insurance, etc etc).

    No economy can survive, muchless grow, providing just the basics of life.

  3. There were a lot of debates right after the financial crisis as to how long the new frugality would last. I’m glad it has lasted longer than the government economists predicted. And, I hope it lasts for decades.

    It may be bad for the economy in the short term that people have pulled back on their spending. But, it will be great for indivduals in the long term, if they deleverage their debt and invest their savings. Then, their money can be spent for goods and services, instead of being wasted on interest.

    The financial sector of our economy had grown too large as a percentage of our GDP. This wasn’t good for our country or for our citizens. It’s not only the government that deserves a one-fingered solute, it’s the banking industry as well. Keep your money for yourself.

Speak Your Mind

Please leave a comment and tell us your version of the hard truth...

You must be logged in to post a comment.