When there is a lack of aggregate demand due to high ‘savings desires’ as the unemployed take jobs when benefits expire, it just means someone else loses a job, and then some, as govt deficit spending falls as well, further reducing aggregate demand. It also serves to drive down wages, as per the latest jobs […]
Tag Archives: consumer spending
U.S. Consumer Spending/Credit
This is a good sign top line growth was continuing it’s modest growth in March. Federal deficit spending continues to work to add the income and savings that allows consumers to both reduce their credit card debt and expand their consumption. Deficit spending continues to be sufficient to support the modest GDP growth and employment […]
November consumer borrowing plunged $17.5 billion
[Skip to the end] Also, when net financial assets (savings) are being ‘supplied’ by deficit spending there it that much less need to borrow for the same spending, and, in any case, the deficit spending can reduce what would have otherwise been borrowed to spend by that amount. The amounts all depend on who gets […]