By figures American's consumers debt has been the lowest in it's existances today....
The problem is not the spending because there is surplus of money, but more towards the policies that are being implamented........
I am not sure what you do for living or not but you are obviously clueless.
American consumers represent two-thirds of the America economy where the other third is government and corporation spending. So if there is a cutback on consumer purchases due to uncertainty about job security or layoffs, the American economy will go into a recession. Now the economy is predicated on continual consumer spending. In short, it is the consumers’ perception of the future that causes them to open their checkbooks and spend, or to close their checkbooks and reduce spending. It is the psychological impressions of the consumer that determines whether the economy is in a recession or has prosperity.
Consumer Debt
One of the biggest hurdles facing the American economy is consumer debt. The current debt of consumers is $2.2 trillion as of the first quarter 2001, which includes credit cards, mortgages, and car loans debt. This debt averages out to be $12,000 for each household of which $8,000 is credit card debt.
What matters worse is that interest has to be paid on this debt. Now interest paid on this debt reduces consumers’ ability to make new purchases, which places a drag on the economy and contracts it further, compounding the problem
Newsweek magazine in their 8/27/01 cover article offers a bleak outlook. “Sixty percent of American families actually spend more than their after-tax income while consumers spend $50 billion more than they earned in April alone. Even more astounding is the fact that 32 million families (i.e. 80 million people) run an annual average deficit of $8,160. These people are exhausting their savings, selling off their investments, and still running huge debts. It will take very little to push them into bankruptcy. For many, just a few months out of work or with reduced income will do the trick.”
With increase bankruptcies, raising unemployment and an economy that is slowing down, this causes consumers to use their credit cards less and drastically cut all forms of borrowing. Now these consumer cutbacks have tremendous implications on the economy and the Federal Reserve Bank.
Most Americans have no idea how money is created in the American economy. Without the consumers and corporation borrowing, there is no new money created, which an expanding economy needs and the only money in existence is checking and saving accounts and investment accounts. In short, there is no money in circulation if there is no debt created.
What does this mean? The McAlvany Intelligence Advisor states the Federal Reserve Bank’s worst fear. “The Fed’s greatest fear is that at some point the consumer may stop borrowing, that he (or she) may slow down or stop their spending, and start saving. Everything the Fed has done both financially and propaganda wise in recent years has been designed to keep the public spending, borrowing and not saving. It has been the Fed’s only way of perpetuating the bubble, which it created.”
Now consumers are up to their eyeballs in debt and there is no way to correct this situation except for massive personal bankruptcies or allow time for the consumers to pay down their debt. Both scenarios mean that the prospect of the economy is a downturn.
And this is the beauty, Which International Credit Agencies are we talking about???????????
The answer is America's own credit bureau is talking about it's own Credit regarding, How American is Conducting..... Even though I do not agree with what the current Administration policies are, but it is full of crap when some reporter in England is talking about Credit Agencies that regulates the Countries around the World...
Just cause these credit Agencies are located in USA don't mean they are American controlled and it will make no difference to reality what an Indian pretending to no about how the USA economy works thinks .its a consumer driven economy and no longer manufacturing based you agreeing with current admin makes jack all of a difference.
Oh hate to do this to you but Chinese economy is no longer dependent on wall marts of the world or call centers but in order for me to explain this to you i am sure i will need pictures or pop up pages.
And for future Leave Pakistan out of the discussion if it has nothing to do with it i am sure you cant digest any thing unless you talk about Pakistan.
