Consumer Spending Up, Employment down, Meltdown Coming

Consumer spending was up 2.9% for the month of August, despite the fact that employment actually went down. The economists breathed a sigh of relief, knowing that the impending meltdown can be put off.

The big problem with this picture is that employers cut the nations payrolls by 4,000 jobs. The only way that people can buy things if they are unemployed is to borrow the money. From what I understand, most Americans are borrowed up to the hilt. Where is this money going to come from? People take it as a given that debt will continue to finance the spending binge. The catch is, the lenders don’t really want to lend anymore. Companies that were stars two years ago are now running into problems with their creditors, because these creditors are sick of having so much money lent out. They want to reduce their exposure by reducing the number of iffy loans. If Beazer is going to get their loan pulled in, don’t you think that some college student getting a degree in philosophy will have their credit card offer frequency go down?  The cost for borrowed money is going to go up, and the typical American will be screwed.  The bankruptcy laws have been tightened, and people will not have their easy out.

We are like a big fat guy that is out of shape, but knows that he doesn’t do anything strenuous, he won’t notice how bad of shape he is really in. If he wants really vigorous exercise, he’ll push two buttons on the remote at once. Similarly, Americans won’t get out of debt or quit borrowing for non-necessities. We will just redefine wants as needs and borrow away. (I really need that manicure and pedicure to look professional for my work. At Mcdonalds. Where I can barely use the cash register because I have retardedly long fingernails.) At some point, the fat man has to get some excercise. The sooner we do it the better, but as a despair-ing man said, “Hard work often pays off after time, but laziness always pays off now.”   At least until you are so fat it takes a crane to get you out of your house.


2 Responses to “Consumer Spending Up, Employment down, Meltdown Coming”

  1. 1 Anonymous September 8, 2007 at 8:14 am

    “Life is a mess, It is like a yeast, a ferment, a thing that moves and may move for a minute, an hour, a year, or a hundred years, but that in the end will cease to move. The big eat the little that they may continue to move, the strong eat the weak that they may retain their strength. The lucky eat the most and move the longest, that is all.”

    -Wolf Larsen

  2. 2 rhill September 8, 2007 at 1:37 pm

    Have you noticed that you can find CD’s offering over 5% for 1 year terms now?

    I’m thinking that we should be really worried right now.

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