Why is this worse than expected: Spending/Income Down
Posted by The Interest on February 2, 2009
Here’s the news this morning from December spending and income:
Spending:
Expected: Down .9 %
Actual: Down 1 %Income:
Expected: Down .4%
Actual: Down .2%
Now, you’re probably thinking isn’t that good? After all incomes didn’t fall as much as expected and people are saving more instead.
Wrong, this is not good for the economy. If spending was down because incomes were down, that would be one thing. But what these numbers say is that people aren’t taking on new debt. That says deflation and contraction of the economy.
Let’s review. Money=Debt. Less debt on the right side of the equation means less money on the left side of the equation. Less money, falling prices. Falling prices, loss of jobs until we implode.
Tell your friends about this problem. Point them to this website. We need to educate people and get them to ask, “Where’s the Interest?”
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