The article ends with a quote that claims the economy cannot rely on households to improve the situation - do you agree that further government intervention is necessary or beneficial?
Monday, August 30, 2010
Consumer Spending Picks Up
Consumer spending increased about .4% from June to July, a slight increase that may be linked largely to car sales. The report also asserts that consumers are saving less. Could this be linked to the decreased credit card debt - is it likely that consumers are saving less but using that money to pay down debt?
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3 comments:
My belief is that the government should stay out of it as long as possible, and let the market dictate itself. If certain companies are destined to fail, let them fail so that someone else can come in and make the business work.
Think about if your life savings, children's college savings, 401K, or annuity plan were all in the hands of Bank of America or AIG. It wouldn't matter who you put your money with because you would be broke if the govt. let them all fail. Sometimes government intervention is important to the economy. I can say that as an "economist," not a taxpaying citizen.
I agree with Scott that the government should stay out as much as possible and let the market dictate itself. If we continue to help these company's labeled "too big too fail", then there is little pressure on them to perform. It is ignorant to believe that these companies don't know that the government is always going to bail them out and thus were sending a bad message.
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