American Economy - It's Magicially Delicious

In last week’s show, Bill Maher made the comment that over 40% of the American population works in the “Financial Services” business. Think about that, 40% of Americans lending credit and selling stocks. It is a great percentage of people who contribute to our economy by pushing paper. It’s magically delicious. Poof! Money!

This morning I read an article, “U.S. Consumer spending eases, while incomes surge.” The most interesting sentence in the article was, “Consumer spending accounts for 70 percent of economic activity.” In layman’s term our economy is built on consumer spending, which obviously is down now because of the unemployment rates continue to rise and issues with credit cards. People are now saving and using debit cards to shop. Consumers are being a lot more careful with spending, and for those who advocate against credit card debt-this would be a good thing right? Wrong! It is not a good thing if our economy depends on spending. And before you get too excited, income surges were from the stimulus and tax incentives and Obama’s rise of the unemployment payouts. It is a false promotion of our income surge.

Honestly, for someone who has worked in an industry my entire career, it is frightening to think that our economy is based on consumer spending. Consumer spending, unlike the production of goods and services cannot be controlled. You can control production, you can supervise service, but you simply cannot control or “force” consumers to spend, although at times we were encouraged to do so. It is a ridiculous base for a national economy and they don’t call it “Voodoo” economics for nothing. I would be more relaxed to learn that 70 percent on our economy was based on tourism, rather than our consumer spending.

Sadly, the one industry that provided the United States with products and services is now going bankrupt. GM has filed for bankruptcy and will be closing plants across the nation, thus adding to the already high unemployment rate and will ultimately reduce consumer spending-thrusting our economy even deeper.

While all is said and done, and credit card legislation passed a few weeks ago, ironically more credit card advertisement spam popped up in my email. Really? Who are these fools spamming me with credit card promotions? I would really like to know who these people are. But you see this perfect example of our nation not getting it-we are not learning the lessons. We just ride it out and wait for the dust to clear, and then continue with the same tactics and “Get Rich” schemes thinking that all our problems with magically disappear. Hooray more credit cards! Hooray more debt! Hooray more US deficit! Hooray more corporate exploitation!

When will it sink it-the bubble burst. We can’t go back. We need to rebuild the economy the sensible way based on the production of goods and services. We all (government, corporations and consumers) need to learn the lesson to spend what we earn, not what is afforded to us on credit. And the even sadder part of this blog-it’s not even our economy anymore. We belong to China.