Spending Less? You're Helping Slow the Economy

[RamboLiberal]

http://www.latimes.com/business/la-fi-econ29jul29,0,7187019.story?coll=la-home-business

Conserving her family's cash as costs rise, Riverside resident Laureen Pittman is postponing vacations, home repairs and other big purchases. For necessities, she is increasingly relying on discount retailers, shopping at Costco instead of Ralphs and Marshalls instead of Nordstrom.

Belt-tightening by consumers like Pittman is a key reason the U.S. economy is slowing. Inflation-adjusted economic growth fell to a surprisingly sluggish 2.5% in the second quarter from 5.6% in the previous three months, largely because of slower consumer spending, the Commerce Department reported Friday.

The economy's latest growth rate was below the expected 3%, which is average for an economic expansion. It triggered a rally in stock and bond markets as investors boosted their expectations that the Federal Reserve will soon halt its anti-inflation campaign to raise interest rates.

Consumers — accustomed in recent years to spending more than they earn, saving little and tapping home equity to pay the bills — have clearly been hit by $3-plus gasoline prices. Whether that and other worries prompt consumers to scale back even more will largely determine whether the economy can maintain a slower but steady "soft landing" or veer toward recession, economists say.

:nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity: :nopity:

[Redstone]

1. Well, you remember what bushyboy told us after 9/11: Go Shopping!

As long as we keep buying cheap crap from Wal-Mart, everything will be fine!

Redstone

[ninkasi]

4. My family's spending habits

are determined by our income, our expenses, and the overall economy. I can't see going into debt to accommodate the Chimp. Perhaps the wealthy who were showered with outrageous tax cuts will step up to the plate. We peasants can't, or won't do it.

[Redstone]

6. Yup, let's let the rich do it. Hey, bushyboy says that giving them tax

breaks stimulates the economy, right?

Redstone

[Quantess]

2. Americans treat Bush so badly. They are making his job hard.

No wonder poor Bush is suffering in the polls. He's trying his damndest to improve the economy. He's confident, he wants Americans to have "consumer confidence", but people are just too stubborn to do what he says!

This will make poor Bush look bad, but really, it's the people's fault.:nopity:

[ninkasi]

5. Damn! Where IS that violin when I need it?

Oh, sorry, I just remembered...I pawned it to buy gas.

Edited...forgot to spell check

[Redstone]

7. Yes, it's hard work. And when I say that, I mean that the work is hard.

The work that I'm talking about is hard, it's hard, the work that I'm talking about. And when I say hard work, I mean work that's hard. It is, that work. It's hard, that's what it is.

Redstone

[SensibleAmerican]

3. The Fed controls how much we spend

Via the interest rates.

[Kailassa]

8. Ain't it wonderful to know who to blame?

Damn these belt-tightening middle class who are now struggling to pay their bills and grizzling just because they can scarcely afford the travel costs of getting to work these days.

Didn't they just get a tax break of a whole 2 bucks a week? And they still won't get back to partying and invest in a 3rd credit card to cover it?

[elehhhhna]

9. Spending the same total...much more on gas & groc than last year tho. DUH

funny how that works.

[Nicole]

10. I'm doing my part to slow it

I've been in a savings mode since Bush took office.

[SoCalDem]

11. A lot of the "big spenders" are tapped out..

The "re-fi every 3 months" crowd is starting to get the shakes.. the balloon/interest only loans are starting to come due, and the people who bailed out before the bankruptcy bill passed...well they are not shopping much these days..

and of course, if you add to the mix, the fact that people everywhere are worried for their own jobs..it's not a pretty picture..

My son got orders the other day to lay off 5 people and to close an office... He's pissed because it's all about the bottom line.. they are still expected to service the customers as well as ever...just with less staff..

Personally, he's not worried becaus if his job goes in layoffs, he gets 20 weeks paid severance and company paid cobra for 12 months..and he has a few other job offers that would pay more..but he's pissed off that he has to lay people off who he NEEDS....and the fact that his office is 4 steps from their bedroom :)

The other jobs he's been offered would mean going back into a "real-world" office :(

[rman]

12. Goes to show that increase of minimum wage is good for the economy

People can't spend money they don't have.

[Sadie5]

13. Never again will I charge anything

A few years ago when interest shot up to around 29% on credit cards, I cut them up and swore to pay for our needs in cash or to do without. I concentrated on being debt free and it is such a good feeling. The greed shown by the banking industry will be their undoing in the end as more folks will adopt a cash only plan.

[RB TexLa]

14. guess I am really hurting it, I canceled a lot after 9/11 sold all

North American stocks when the market reopened and have not reinvested in them or returned to spending as before.


(I did keep money in the three North American oil companies I bought the day the SC made their decision on the Florida recount.)

[n2doc]

15. Well howdy, I guess I'll take on another 3-4 credit cards

Nothing is too great a burden to take on to help support our great country! Think I'll buy me a big ol TV set, a bunch of commie made stuff from Wal Mart, and maybe even a Hummer, if I can get them to lend me the down...

[soup]

18. Whatsamatta U?

Haven't you heard -

It's not just a Hummer, it's a tax break!
http://seattlepi.nwsource.com/local/104601_hummer17.shtml

With what you're saving, you'll be able to buy even more stuff!

and that down payment? pfffftt - no worries! Just re-fi the house!

Think you can't afford the closing costs or transfer fees? Sure you can! Just max out those credit cards!

soup ---> providing simple solutions to simple people worldwide! unfortunately, my service is not free, and I've now got to charge you (and anyone else daring to read this post) an exorbitant amount for my brilliantly simple (aka b.s.) advice.

bigger bigger bigger
more more more
onward, patriots!

Besides, the rapture is nigh! the phrase 'paybacks are a bitch' is no longer valid! Our new motto is 'We may not be able to take it with us - but what the heck, we won't be around to pay the piper.'

and now back to our regularly scheduled programming...

[no_hypocrisy]

16. What's the other option: personal consumer debt, replete with

28% compound interest, late fees, injury to credit reports, etc.

No, maybe "slowing down the economy" might be a necessary lesson for many consumers to learn to live within their means.

[grilled onions]

17. Minimum Wage Equals Minimum Spending

Lack of work means lack of spending...Doughnut Hole time for those on part D means less buying of doughnuts...Less confidence in the economy means less confident spending....Ga$ in thr car means le$$ to spend elsewhere. It's plain basic math. You can't spend what you don't have--unless you're in Washington where the word budget doesn't exist in "their" world unless it's to cutback on what we get in "our" world. After all THEY have bills--we only have expenses!

[Joanne98]

19. GOOD! An economy based on consumer spending can't last.

It's a FAKE economy and always has been. Bring back manufacturing and start SAVING before the roof caves in.