The Consumption Economy Is Dying — Let it Die

Tuesday, August 16, 2011
By Paul Martin

The big problem with consumer spending is that if you buy a product made outside the U.S., it doesn’t encourage domestic investment. And that’s what we really need.

By Michael Mandel
TheAtlantic.com

With the stock market plunging, we’ve heard plenty of warnings that a “pullback” in consumer spending could trigger another recession. Let me suggest an alternative. The last thing this economy needs is more debt-fueled consumer spending which mainly creates jobs overseas. Instead, we should be focused on boosting investment in physical, human, and knowledge capital.
Now, who am I to be dissing the American consumer? Don’t I know that consumer spending “accounts for 70% of economic activity,” as many economic reporters have written in recent weeks? (Indeed, if I have to read that number in another story, I might be forced to go all Office Space on a piece of expensive consumer electronics.)

The Rest…HERE

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