Saturday, November 5, 2011

Economic schizophrenia

When the financial crisis hit America in 2008, we all agreed that the entire United States was under the influence of credit (the new age drug) and needed to deleverage. We went from saving -1% to saving around +4% four years later.

Since our GDP was 70% consumption based, any sane and pragmatic person would immediately assume that consuming less would hurt the GDP right? Of course it did! Now we're complaining that the economy is not as buoyant as it should and that unemployment – among other scourges – lingers on. This contradiction of thoughts illustrates our Nation's economic illiteracy or our incapacity to make healthy decisions!

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