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Archived: Editorial: Don’t Blame the Consumer for Not Spending

Is it better when times are bad economically to sit tight and hope for the best? Or is it better to do something, anything to try and turn the bad news around?

That’s the question American legislators are grappling with today. Most of those charged with making critical decisions on our economy have never faced the kind of snowballing drop in this country’s net worth.

So what you have are some economists telling consumers to spend whatever funds they have to give the U.S. economy a much needed push upward, instead of continuing to add to the economic downward slide — that has everyone worried — by keeping their wallets closed.

But when consumers are being told that one of the reasons the U.S. is in economic trouble is because consumers have spent too much and now can’t pay their debts, is it reasonable to expect them to feel safe spending on anything that may increase their indebtedness?

It appears that consumers have opted for the safe path — the same path that encouraged their parents and grandparents to save and be frugal after living through the Great Depression. Can you blame them?

Everywhere one looks people are losing their jobs, homes, and retirement funds, at the same time local and state governments are raising taxes and fees, and the cost of food commodities are going up.

The people who should be pushed to spend are the large numbers of investors and corporate CEOs who have squirreled away billions and billions of dollars earned during Wall Street’s golden days.

Nothing seems to make much sense these days. All the government bailouts and spending have so far failed to inspire confidence in the economy or hold back the growing number of unemployed. Unless and until there is a recognition that consumers will continue to look after themselves by restricting their spending, the downward spiral can be expected to continue.
Is anyone paying attention to what the American consumer is saying?