Tomorrow We Dance To Freedom






Consumer Spending Blip - Economy Still Tanking

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The 0.8% increase in retail sales (excluding the 2.6% increase in gasoline sales) was attributed to the one time spending of every last dollar of government stimulus checks on higher priced products. Given that the current rate of inflation (price increase) is not factored into the 0.8% increase in retail sales for May it becomes apparent that this blip in spending is not very spectacular given the $50 billion stimulus by the federal government. In fact if we look at the "Total Business Inventories/Sales Ratios: 1999 to 2008" we clearly see that consumption has been trending down for many years - a clear reflection of stagnate to declining wages and the elimination of well-paying jobs in a once thriving industrial sector.

Nothing has changed the fundamental direction of the U.S. economy. It is still tanking mainly due to constrained consumption spending by consumers who have been over extending themselves through their use of more and more credit in the form of credit card and 2nd mortgage debt in order to maintain their standard of living in the face of declining or stagnate wages. With credit more difficult to obtain and home values plummeting we'll look back upon this nominal growth in retail sales fondly when the U.S. economy is convulsing uncontrollable in a steady decline over the next few years.

There is only one way to resurrect an economy that has decimated the spending power of 95% of its citizens - redistribute a substantial proportion of the wealth horded by the top 5% of the business elite to those 95% of our citizens who represent the engine of consumption in this distorted totalitarian economic society.

Granted there still remains many structural problems that distort this contrived 'market economy' in the favor of those 5% of the business elite that control our society but until we effectively address these issues we must substantially increase consumption spending over the long-term by those who will spend it - the 95% of average American citizens.

In essence, the federal government must invest in a major infrastructure program of building a fast train network across our country, and stimulate the development of green industries with one of the results being the creation of an alternative energy electrical grid. These are the types of sustainable long term stimulus to the U.S. economy that will position us for continued growth within the 21st century - not the short sighted, short term illusory 'feel good' stimulus of 2 - 3 months.

We must move from supporting a contrived, contorted, and distorted economic system towards a more sustainable and democratically anchored society that includes everyone in the fruits of a better quality of life.