Who Will Save The Economy? Not Strapped Consumers

Consumer delinquencies hit a record high in the first quarter of the year. Debt-to-disposable income ratios are down only slightly from the beginning of the recession. Who will save the U.S. economy if consumers can’t return to our habits of buying crap we can’t afford and don’t need?

Increasing nemployment and underemployment are making consumers reluctant to borrow and spend money.

The reason for rising delinquencies, and the reluctance to borrow more, is growing unemployment and, as a falling work week demonstrates, underemployment. Joseph Lavorgna, Deutsche Bank’s chief U.S. economist, points to a pattern of increasingly “jobless” recoveries starting in the 1980s. Furthermore, he says, the last upswing, which ended officially in December 2007, was weighted disproportionately to the construction and financial sectors. Jobs lost there won’t return soon.

Restrained incomes and higher saving promise a grinding recovery with the threat of deflation and a lackluster outlook for the country’s banks and cyclical industries. The wild card is whether authorities push aggressively for a politically more palatable but ultimately dangerous alternative: Inflating those debts away.

Inflation! Yay! Good news for Americans who have next to no savings but plenty of debt. We’re in trouble when none of the possibilities for recovery are particularly palatable.

Don’t Count on Consumers [Wall Street Journal]

(Photo: Great Beyond)


Edit Your Comment

  1. Skater009 says:

    Hey the PArty is over already

  2. Sure I could agree with you, but then we'd BOTH be wrong. says:

    Call me stupid, but how does inflation help those who have “next to no savings but plenty of debt”

    If prices go up, you still have plenty of debt, but everything you need (or want) to buy costs more, so how does the debt go down?

    • HIV 2 Elway says:

      @Dooley: You have $100,000 in debt. Prices rise but so do wages, all of a sudden your existing debt is easier to pay off. Conversely, any existing savings you have are worth less.

      • Prole says:

        @HIV 2 Elway: That only works if wages rise. Anybody want to put any wagers on their wages going up?

      • Sure I could agree with you, but then we'd BOTH be wrong. says:

        @HIV 2 Elway:

        Let’s take my position… I’ve been working for the same company for over a decade. Sure, I get a little raise each year, which is standard. (Cost of living, if you will, which this year was anything but)

        So, if inflation causes prices to rise, I don’t think my employer is going to say “Hey, we have inflation, so we’re giving you a huge raise this year.”

        • HIV 2 Elway says:

          @Dooley: If your company, who will now be charging an inflated price for whatever they do, doesn’t play ball and you can’t afford basic goods you will quit your job and find one that will pay you an inflated wage. It’s not inflation if wages don’t rise too. This is the most basic of all economics.

          • WhoAsked You says:

            @HIV 2 Elway:

            “you will quit your job and find one that will pay you an inflated wage”

            In case you haven’t checked outside in the last oh say YEAR and a HALF, ~~THERE ARE NO JOBS OUT THERE~~.

            Please don’t throw out worthless advice that just doesn’t apply any more. Thanks.

            • humphrmi says:

              @WhoAsked You: HIV 2 Elway is talking about what happens during an inflatonary cycle, which we are not in.

              It’s very simple folks:

              Deflation = Lost jobs, lower prices, lower wages
              Inflation = More Jobs, higher prices, higher wages

              The article is talking about what will happen when inflation comes back, which it hasn’t, so don’t sweat it yet. When it does, you will either make more money to be able to pay higher prices, or you will find another job that does pay more. Until then, we are in a recession, and you will hold on to your job for dear life and pay lower prices for most things.

              • HIV 2 Elway says:

                @humphrmi: Wait, someone who understands basic economics?

                Yes, its very simple inflation punishes the responsible by making their savings irrelevant and rewards the irresponsible by making their debts manageable. Deflation punishes the irresponsible by making their debts insurmountable and rewards the responsible by making their savings more substantial.

                This is basic econ, the most basic. This, and basic finance like compounding interest, should be taught to every American high school student.

                • Joey_Brill says:

                  @HIV 2 Elway:

                  At ‘the most basic’, in 1991 I had Japanese customers crying because their 10 year cd’s at 17% fixed were maturing and they had to roll them into 2% instruments.

                  You’re a big boy/girl; nobody punishes you.

                • mac-phisto says:

                  @HIV 2 Elway: wait, i’m confused. humphrmi says we’re in a deflationary period & you say that means that “responsible” are rewarded & the “irresponsible” are punished. yet, prime is at 3.25% & i can’t find a savings account that pays 0.5%. CDs are in the 1-2% range.

                  how exactly is that rewarding the responsible again?

                  • Andrew Farris says:

                    @mac-phisto: Bank of Internet, paying 2.06% for standard savings accounts right now. You’re not trying very hard.

                  • Trai_Dep says:

                    @mac-phisto: That’d be fears of slipping into a liquidity trap, or hovering close to it. Whatever surplus capital is being hoarded rather than invested. Rates have no affect, since non-monetary forces are causing the trap. Nominal rates are zero and the Fed can’t PAY money for people to take loans, so economies languish in recessions for decade(s).
                    Since the value of money is flat or appreciating (costs deflating), a $100K investment isn’t prudent: tomorrow’s customer will pay a dollar worth, say $2 for a good when that same dollar invested by the company today is only worth $1. It’s more rational (and zero risk) to simply hoard today’s dollar and wait until its buying power doubles. So no one invests, no productivity gains, thus a flatlined economy with no growth, now new jobs and no end in sight.
                    What’s happening now is that the government is throwing out money, hoping to get the banks lending again, to get some inflation going, so they can then have monetary tools to use to clamp inflation down to reasonable levels. We know how to handle inflation very well. It’s deflation that’s terra incognita, and problematic.

                    But yes, the part that burns is that the same people that wrecked the globe are the ones, by holding us hostage, that we need to now save. Both for those macro-economic reasons, and using that extra float as a somewhat hidden (but not to us: Yay Consumerist!) subsidy to help the banks build their balance sheets back up to operable levels.
                    It stinks, but we’re grownups and sometimes grownups have to do the unsatisfying, necessary things. This is one of those times.

                    (that’s my take at midnight: feel free to correct, learned co-commentators)

                  • HIV 2 Elway says:

                    @mac-phisto: A little late but oh well…

                    No, think in terms of existing account balance not forward looking rates. During deflation wages and prices drop, right? Ok so the guy with $10k is savings is sitting pretty because while his wages may have dropped the $10k he has tucked away can now support him longer than it could before, his existing dollar goes further. Conversely, the guy with $10k in debt is even further crippled. His wages have dropped and he now has to pay off an existing debt with less income.

            • Andrew Farris says:

              @WhoAsked You: Because it doesn’t apply now does not mean it will not apply when inflation rises steeply.

            • the_wiggle says:

              @WhoAsked You: seconded. it’s gotten to the point where finding a 1st job is hard enough, never mind a 2nd.

        • SarcasticDwarf says:

          @Dooley: Exactly. The other poster is also assuming that wages adjust for inflation. So lets say that inflation is 3% annually. I know that in my job (where I already make only 75% market average even at entry level) we have a wage freeze for two years. That means that I will make at least 6% less two years from now than I did today. Want to make a bet on whether we will all be given a cost of living adjustment plus 6% in two years time?

          • HIV 2 Elway says:

            @SarcasticDwarf: If wages don’t increase with prices then the price increases can’t be sustained and manufacturers, food providers, whoever will have to slash the prices of their goods that are just sitting in warehouses unsold. If the wages can’t support price increases the prices come back down to an equilibrium.

            • morlo says:

              @HIV 2 Elway: Wages certainly don’t need to increase. The American standard of living is pretty high, and there’s nothing stopping it from dropping until it hits Haiti or Somalia levels.

              Americans tend to blindly believe in progress, but decline is just as possible, and probably at this point inevitable.

              • m4ximusprim3 says:

                @morlo: You’re not getting the point. The government can flood the system with as much money as it wants. Therefore, everyone gets paid more, everyone pays more, and the value of your savings and debts drop. When more money enters the system than can be absorbed, you get inflation. If the goverment just started printing billion dollar bills, nobody would work for $8.50 an hour.

                • morlo says:

                  @m4ximusprim3: It has been printing billions of dollars. And people will are working for less than 8.50, because people are cheap and will work for even less than their cost of living, unlike a donkey, which would lie down and die.

            • SarcasticDwarf says:

              @HIV 2 Elway: That is a completely retarded assumption. Yes, wages do generally need to increase, but that does not means they increase
              *for everyone
              *at the same time as the inflation
              *at the same rate as inflation

              • humphrmi says:

                @SarcasticDwarf: Regional or industry specific inflation is not the same thing that the article was referring to, which is national or global inflation across all industries within the economy. In a global or national inflationary cycle affecting all industries (as we saw, for instance, in the early 1970’s) prices and wages rose across the board for the majority of people. If you have a situation where substantially less than a majority of people’s wages rise in concert with prices, then you have something else – either Stagflation or simply inflation within a particular industry or region.

                It doesn’t matter anyway. It’s not like anyone will be cheering getting a huge raise when their added buying power is being offset by spiraling prices.

              • humphrmi says:

                @SarcasticDwarf: Oh and might I add, a little inflation right now would be a great thing. Inflation is the opposite of deflation, which is what we’re suffering through right now. Everyone’s demonizing the word right now, and I’m not sure that everyone understands why.

                • sirellyn says:

                  @humphrmi: If a little inflation would be great then so would a little deflation. Inflation is NOT great.
                  Yes debts would be less, but interest levels would rise to match. Banks will make money on you no matter what.

                  Federal Debt would effectively reduce, but no one would actually lend the US money. Why bother if essentially you are getting back less money than you lent? So most of the programs the US government has would have to get cut. They certainly can’t tax you if you are broke.

                  Wages would not be able to increase as fast as actual inflation. Employers would make their best conservative guess. If they pay you too much they’ll be broke. In countries with hyperinflation jobs pay increasingly worse and worse.

                  DEFLATION makes money worth more. Which encourages people to save money and pay off debts. After all if your debt is getting bigger by interest and monetary value then its in your best interest to pay it off.

                  Savings is the key to the growth of a country. With savings you can spend your extra money wisely to loan (with interest) to others who will give you back more than you put in. You also have a reserve of money in case something bad happens. Savings = Safety.

                  • gaywolverine says:

                    @sirellyn: If everybody follows that philosophy and nobody borrows money than the DEMAND for borrowed money goes down, DECREASING interest rates. If you teach people not to have debt than where will your savings go to? Some inflation is good, just as some borrowing is good. The economy is based on people SPENDING money not saving money. If people saved 20 per cent of what they earned the entire economy would collapse

        • HogwartsAlum says:


          Really. The last raise I got was a dollar, and the one I just got was like ten cents.

    • panzerschreck1 says:


      your debt is worth less while your income increases. inflation doesn’t just push up prices, it pushed up earnings to match. the one thing it doesn’t push up is savings a debt.

  3. panzerschreck1 says:

    dont worry, obama’s the president.

  4. sleze69 says:

    Yes, the Zimbabweian economic model will be our salvation. Thank god my Reardon metal stock is doing so well…

  5. trotskysghost says:

    Trickle-down economics have failed the vast majority of this planet.

    Unless companies are willing to pay living wages to their employees, there can’t be any long term consumer demand.

    Under our current system, every owner of at least a medium sized company is forced to increase profits and drive down price and costs to stay competitive. If they don’t increase their profits faster than their competitors, they get bought out. If they don’t reduce their cost (especially labor) they go under. With every company focused on their own individual needs to drive down labor costs, they don’t realize that as a whole, they’re reducing the purchasing power of their consumers at the same time.

    It’s a never ending race to the bottom.

    For years people have been trying to maintain the same standard of living they, or their parents, had (thanks to unions, both directly and indirectly through the threat of unionization). When they couldn’t maintain that standard of living with their regular income, their wife got a job. Then when their combined income couldn’t cut it either, they went into debt. Now that credit has dried up, they’re realizing they’re at the end of the line.

    Our free market system is slowly, but surely, reducing the vast majority of the people in this country to a third world standard of living.

    It’s time for a change, and it’s going to take something significantly more than just electing someone like Obama.

    • Mr_Human says:

      @trotskysghost: What do you have in mind (as though I couldn’t guess)?

    • HiPwr says:

      @trotskysghost: You mean third world like Cuba?

    • rpm773 says:

      @trotskysghost: Alas, the economic plight of the laborers will continue so long as the Romanovs are in power in Moscow, doing the bidding of industrialists in Prussia, Berlin, and London!

    • winshape says:

      @trotskysghost: Sure thing. Show me any other country where people living at the poverty line have running water, electricity, a couple of color TV’s, a car (or two, or five if you count the couple on cinder blocks), and generally struggle with being overweight.

      Take your socialism and move to any number of other countries where it hasn’t worked.

      • bohemian says:

        @winshape: The overweight thing frequently comes from poor nutrition because simple carbs like potatoes, white flour along with corn and soybeans are cheap and frequently subsidized foods.

        People have running water in some pretty shaitty countries. The level of consumer crap someone in the lower income brackets have is really not an indicator of quality of life. If people still can’t afford or obtain healthy food, decent education and proper health care they are not doing that great and frankly are not better off than people in some third world countries.

        We allowed companies to continue to drive down wages to increase profits. They were too short sighted to see that if employees can’t buy products the company will run out of people to sell things to. This isn’t an excuse for some communist model. It is the result of short sighted unregulated “free market” greed. It would not have happened if there were some labor standards and some oversight in the stock markets.

    • Bryan Fernandez says:

      @trotskysghost: Europeans don’t even believe in this crap. SWEDEN of all places is privatizing its economy and is not bailing out its car companies. You can keep track of that at http://www.thelocal.se. I didn’t know Sweden’s pharmacies was a state monopoly until this year.

      “Another step in the pharmacy monopoly deregulation, set to take effect on November 1st, will allow grocery stores and other retail outlets to sell certain non-prescription drugs to customers over the age of 18.”


      • rpm773 says:

        @Bryan Fernandez:

        Europeans don’t even believe in this crap.

        Yeah, the 20th century is going to be covered in next week’s chapter. Cut him some slack.

      • LJKelley says:

        @Bryan Fernandez:

        I’m a socialist and I was against bailing out GM and Chrysler. Sometimes lessons need to be learned. On the other hand I would have made sure layed off workers survived the fall of GM and Chrysler.

        Socialism is the people’s control. And the people were against helping GM and Chrysler.

        Thats why Cuba and Soviet Russia are bad examples of Socialism as they are/were dictatorships and thus have/had no democracy. Webster’s dictionary defines Socialism as the people’s control over production and distrubution. I think the people had little say in Soviet Russia.

    • SacraBos says:

      @trotskysghost: But won’t using a governmental system in use by nearly all the third-world countries reduce us to the same third-world conditions exhibited by those same third-world counties?

      You seem to be saying that we have to become like them, or else we’ll become like them???

      What I think we need to do is get away from the short-sighted concept of investing based upon rising/falling stock values, and go back to long-term investing in dividend-based stocks. The stock-value rollercoaster encourages making short-term decisions to boost stock value, even though it results in bad long-term decisions.

      • pupu says:

        @SacraBos: You seem to be saying that we have to become like them, or else we’ll become like them???

        I think what he is saying is that we are going to become like them no matter what we do because we are now competing in a global economy. I agree – it is not a nice thing but it is correct.

        What the Socialists bank on is that as the standard of living falls the INEVITABLE outcome is a sort of revolution in which workers assume control of the means of production. One of the major flaws of Socialist theory is that it relies on a chain of events that it asserts must always occur. In Marx’s day it was possible for the people to rise up and forcefully overthrow the government. In Marx’s day governments didn’t have things like Apache Helicopters, Stealth fighters, aircraft carriers, etc. The only means that the people in the US have to cause a “revolution” is the vote. We vote in people who pass laws that redistribute wealth and make it more and more difficult for business to make a profit. In a global economy businesses can just close their doors and reopen in a place like China or India. By the time the existing government structure evolves to resemble socialism the “means of production” in the sense Marx thought of will no longer exist in the US – manufacturing will increasingly occur overseas. Marx did not contemplate a world in which it is possible to build a Kia in Korea and ship it across the world to the US and still have it cost less and be higher quality than a US manufactured vehicle. He assumes that the “means of production” are distributed relatively close to the point of consumption. This is not the case in today’s world. By the time that our current government “evolves” to resemble socialism the only “means of production” left in our country will be the skills that individuals have to add value to processes – or Skilled labor – (not labor). It is much more difficult for the (unskilled) worker to seize your ability to program in Java than it is for them to seize a factory. Socialism won’t work, technology has rendered it obsolete.

        • the_wiggle says:

          @pupu: “In Marx’s day governments didn’t have things like Apache Helicopters, Stealth fighters, aircraft carriers, etc. The only means that the people in the US have to cause a “revolution” is the vote.”

          yes, and why so many of the PTB are doing their damnedest to disarm what’s left of the american people willing to be armed.

    • I Love New Jersey says:

      @trotskysghost: And socialism has been proved as a failure, too.

    • morlo says:

      @trotskysghost: Time to have a dozen kids and send them to work by age 8. With 18 incomes (including grandparents or an unmarried sibling) the average family can easily afford that mortgage payment unlike all the lazy deadbeats.

    • ARP says:

      @trotskysghost: You have one or two good arguments in there, but then you throw it all away by going a overboard, calling yourself trotskyghost and linking to a communist (even though it calls themselves socialist) site.

      100% socialism [government owns all means of production] is no more the answer than anarchic capitalism. The debates that rage on this site are where to draw the line in the socialism/capitalism spectrum.

    • bmorg003 says:

      @trotskysghost: Well as other commenters have said, you do make some very good points, and it is pretty obvious that our current system (casino capitalism), as it is, does not and will not work. Some major changes need to be made in order to have a system that is semi-sustainable. While I’m no expert, this guy seems pretty smart and he seems to agree with some of your major points: [www.nytimes.com] (and he happened to see all of this stuff coming and has been warning us for some time, and he still is). Too bad we don’t listen to smart people, but we do listen to power/money…

    • the_wiggle says:

      @trotskysghost: dead on & well put.

  6. HiPwr says:

    There’s already talk of another “Stimulus”. That will fix it.

  7. Snowblind says:


    (bend over, here it comes again)

  8. The-Lone-Gunman says:

    I’m curious how many people are looking seriously at the possibility of leaving the country altogether?

    I see riots in the streets over the horizon if things don’t turn around–and quickly. I would rather watch that play out from somewhere else than the front lines.

    • Eyebrows McGee (now with double the baby!) says:

      @The-Lone-Gunman: Where would you go?

      • The-Lone-Gunman says:

        @Eyebrows McGee (now with more baby!):

        I’ve identified several possibilities where the value of US currency still spends well at current exchange rates. If I have enough right now to stop working (in the US) if I wish, living in these other places for the same amount buys me a great deal of privacy and insulation.

    • yagisencho says:


      And you think riots *won’t* happen somewhere else? They don’t call it a ‘global recession’ for nothing…

    • morlo says:

      @The-Lone-Gunman: Where do you plan on going? Unlike the USA, few other countries will let you just walk over their borders and start working.

      Anyway the economic and political failure is ominously global. American rioting might be preferable to the Rivers of Blood traditionally favored by other countries.

    • PunditGuy says:

      @The-Lone-Gunman: Riots? Really? You are seriously overestimating both the problem and the ability of the general population to care about anything.

    • Bryan Fernandez says:


      Canada’s doing fine, though still hurt by the crisis. But you won’t see Canadian cities burn in flames. Netherlands is doing fine too. The EU’s unmeployment rate of 8.9% is lower than the US, it would’ve been lower if Spain’s OMG 18.7% is omitted.

    • pupu says:

      @The-Lone-Gunman: I’m curious how many people are looking seriously at the possibility of leaving the country altogether?

      I see riots in the streets over the horizon if things don’t turn around–and quickly. I would rather watch that play out from somewhere else than the front lines.

      I’m with you but I don’t think things are going to go totally to hell overnight. It will be more like a slow 20 or 30 year decline. I think things will get better before they get worse.

      • The-Lone-Gunman says:


        So you see a ‘bounce of prosperity’ before the decline?

        If you can identify it when it comes, it might be possible to make a quick financial killing then.

      • the_wiggle says:

        @pupu: Heinlein’s Crazy Year’s come to mind.

    • the_wiggle says:

      @The-Lone-Gunman: we’ve looked. it becoming clearer by the day that it’s time to go & go far.

      trouble is, where to go? we are planet locked & there’s certainly neither the will nor the power to change that.

      as for here, there’s no where to go that’s sufficiently better than here to go to. never mind the decreasing ability of people to gain the skills & cash to GO.

  9. pupu says:

    Nice – another example of punishing the people who did the right thing (save) inorder to bail out the people who did the wrong thing (spend). Whats next – a government program to infect people who are abstenant with AIDS?

    • gaywolverine says:

      @pupu: Why is saving the “right” thing? Saving and spending are not moral or immoral acts. You take a risk saving money that wont be worth what it was when you could have used it for stronger purchasing power, or you could have invested it in something that actually was PRODUCING something. Your money in a bank is not producing anything except PAPER gains. Without people spending the result would be 50 per cent unemployment. Companies do not need to produce because those who did the so called right thing stopped spending money. Nobody NEEDS a TV, car, couch, etc. You couldmake all yoru own, and spend no money, but have no fucking job.

      As for your other comment, please tell us what abstenant is? Maybe you should get an education before you comment again.

  10. laserjobs says:

    Best case senario would be for the US to follow the Japanese model of the deflationary decade. There has been very little unrest and people are not starving to death.

  11. zandar says:

    Who’d have though allowing whole industries to pursue workforces offshore for the very lowest price possible, circumventing the system the Labor movement spent the 20th century developing would result in- gasp- unemployment, no spending power, and inflation?

    Capitalism- it’s pretty sweet, eh?

    • ARP says:

      @zandar: I don’t think you should dismiss capitalism all together. It’s a particular form of capitalism where we have private profits, social losses, where government pays for infrastructure and even goes to war for corporate interests.

    • pupu says:

      @zandar: Who’d have though allowing whole industries to pursue workforces offshore for the very lowest price possible, circumventing the system the Labor movement spent the 20th century developing would result in- gasp- unemployment, no spending power, and inflation?

      Who’d have thought the labor movements demands for compensation that is totally unreasonable given the skill level of the workers and the actual value that they add to the product would result in companies moving manufacturing operations overseas?

      These union DBs were as short sighted as the DBs running AIG who wanted to inflate the bottom line in time for their annual bonus.

      • krom says:

        @pupu: Right, so the answer to the economy is for workers to work for shit wages and shit benefits so they can’t afford anything at all. Because they have to compete with people who don’t have, say, paved streets or, say, democracy.

        Sorry, no.

        Maybe instead the country club execs and the downtown condo beemer boomers can stop raping, pillaging, and hoarding the economy.

        • pupu says:

          @krom: Right, so the answer to the economy is for workers to work for shit wages and shit benefits so they can’t afford anything at all. Because they have to compete with people who don’t have, say, paved streets or, say, democracy.

          It is not a very nice answer. It is not an answer that I like any better than you do. But economics is not based on concepts of what people are entitled to any more than gravity stops to ask if you deserve to fall after you step off a cliff. This is happening. It will get worse.

          By the way – what makes being born in the US somehow entitle an uneducated unskilled worker to a higher standard of living that an uneducated unskilled worker in India? If anything, the guy in the US had way more opportunities to develop skills than the average unskilled worker in India – after all our unskilled worker in the US had paved streets, democracy, and student loans that are available to pay tuition for every US citizen.

        • Andrew Farris says:

          @krom: Feel free to start a company any time you’re ready to do it better. Honestly, the founding fathers of our great nation would slap you across the face for this attitude of ‘successful people make my life suck’. Do you dislike working for a big corporation that has management sucking it dry with huge bonuses? Ok, do something else. Blaming your lack of something else to do on a corporation maximizing its profits for the shareholders is pure idiocy, nothing more.

  12. Skin Art Squared says:

    @The-Lone-Gunman: “I’m curious how many people are looking seriously at the possibility of leaving the country altogether?”

    Started working on that plan last year. I have no intention of saving the economy by buying more useless crap, and I want to be long gone when it implodes.

    All the talk about the recession ending this year or next year is utter bullshit. That talk is designed to keep the masses complacent. If people grasped the idea of how bad it really is, there would already be panic in the streets. Classic carrot on a stick.

    For all the foreclosures out there already, there are countless houses sitting empty and in a no-foreclosure-date limbo indefinitely. The banks don’t want them, there’s no one to buy them, and they can’t keep up. That’s a hole that won’t be filled for a long time.
    College degrees are becoming more worthless than the paper they’re printed on. There’s only so many jobs to go around, and Starbucks Hippie Poet Wannabe is in decreasing demand.
    Healthcare is so ridiculous I can’t even discuss it any more.
    The credit business, or we can call it what it really is, the Debt Business is in shambles. Tough to squeeze money out of empty pockets. Defaults are up, driving scores down, making future credit either impossible or too expensive to consider.
    Banks continue to fail. Businesses continue to go under.

    And yet….. nothing has changed. The tv is still trying to sell you more crap than ever. Feel bad? Buy some shit. Feel good? Buy some shit. Depressed? Buy some shit. Lose your job? We’ll help you buy some shit.

    If buying shit is the answer, we’re fucking doomed.

    • Andrew Farris says:

      @BZMedia: And yet lots of companies are saying they expect enormous shortfalls of engineers in the US for the next 10 years as the baby boomers finally all retire. Odd.

      • rorschachex says:

        @Andrew Farris: It’s because becoming an engineer requires one to not be lazy. As a matter of fact, the shortfall of engineers makes perfect sense given the circumstances. College degrees are becoming increasingly worthless because they don’t indicate skill or work effort, they indicate you spent $xxk on your education and deserve something. Honestly, how many art history majors do we need? How many people did I see in college balk at the work needed to become an engineer and opted for an easier major, but still expect to earn just as much if not more than an engineer?
        Laziness is what’s destroying our economy. People who aren’t lazy will be fine.
        I’m not saying I’m immune to laziness, I’m not, but I’m lazy when I can be. I’m an engineer, whatever happens, things will still need to be designed and built, hopefully over here, if not, then wherever.
        People moving from one area to another is not historically uncommon.

        • cerbie says:

          @rorschachex: also, with the degree meaning less, what’s the incentive to spend so much money into it? I’ve had no plans to be a proper engineer (though I’d like to work in some low EE courses if I go back), but I’m not gung-ho for completing a BS precisely because it’s more of a cost than it is reward, right now. If I could be fairly assured of a decent job, with decent wages, and decent benefits, if I worked for said degree, I’d be all over it. Maybe those worrying about not having enough engineers should consider what caused people to go through with becoming an engineer in the first place.

          • rorschachex says:

            @cerbie: I agree with you there. If at any point during my undergraduate education I felt there would be a risk to my gaining employment, I would have switched majors. I guess I’m part of that extremely slim minority that is gainfully employed, enjoy what they do, and is having their master’s degree paid in full by their employer.
            Yeah, few people mention that last fact, but many large employers will pay for your master’s degree since it’s tax-deductable to them.
            I don’t mind working the full 40-hour workweek and then devoting the extra time at night and on the weekends to get the degree. Both of my parents did their master’s degrees this way too.

          • the_wiggle says:

            @cerbie: words right out of my mouth – lolz.

        • morlo says:

          @rorschachex: Your engineering job will probably still be outsourced to India, where they can find someone to do it for $15k. The art history graduate who planned on working at Starbucks or in a museum will still be employed.

          Not being lazy is no guarantee of success. You also need to get others to work for you, which is in a way actually being lazy.

          • rorschachex says:

            @morlo: I doubt my immediate job will be outsourced to India since the government’s my customer and they have a policy about not letting foreign workers do what I’m doing. However, it’s possible that in the future more engineering jobs will be outsourced to India because we don’t produce enough engineers. That’s a real problem. I personally know of no engineers having any problems finding a job in this economy, the demand is there.

            I don’t agree with your last statement, but that may have to do with a difference in personal definition of success. I have yet to meet a hardworking person who’s not successful. Granted, sometimes there are forces outside of our control that cause problems with attaining one’s definition of success.
            I think, in your last statement, you should be saying that you need to create a niche to fill. I am attempting to fill said niche, I’m the only person in my group that knows how to do what I’m doing, I’d like to think that creates some stability and security.

            In the end, if my job ultimately gets outsourced to India for $15k, I’ll follow it since at that point $15k in India would be worth more than what US would be willing to spend on labor in general.

  13. JGKojak says:

    Inflation can be a GOOD thing.

    Say you owe $100,000 on your house. In theory, after 10 years of inflation, you still owe $100,000 but 100,000 buys less- so its helped you in that sense.

    And sense houses/cars are the major debt people have, when prices rise, they just buy less crap they don’t need.

    Here is the problem:
    Wages ARE tied to inflation in a non-service economy. In a service economy, perhaps not. We have yet to see. So far it doesn’t look good.

    The only answer I have: when the few at the top are FINALLY hit (the way they should have been w/out a Govt bailout), they’ll start to make changes.

    What changes can be made:
    1) Stop outsourcing jobs. Its actually not hard. Just require goods manufactured to meet labor/wage/environmental threshholds.

    2) Some form of Govt healthcare, so people can actually leave their jobs and negotiate for higher wages or become independent, without fear of losing healthcare,.

    • Outrun1986 says:

      @JGKojak: I learned pretty quickly that you really can’t be without health insurance, its just a bad idea. Many people won’t leave their job because along with the job goes the benefits. Finding another job that offers benefits isn’t always easy. Even with the extended unemployment and Cobra help which is a start at least people are still reluctant to leave their jobs (especially since finding another job could be a 6-12 month task these days). Paying for your own health insurance when your unemployed is nearly impossible, hope you have tons of money saved up. God forbid you get sick or have an accident during the time of unemployment, you might just go bankrupt. Its come to a point where your health depends on your job and your job depends on your health. Health is the most basic need, and this country can’t even provide for that in its current state for those that don’t have a benefits plan at the job they work or for those who are unemployed.

      Don’t even get me started on those that have insurance but the insurance isn’t covering any of their conditions etc..

      • the_wiggle says:

        @Outrun1986: hear you there. i would love to leave the call center ghetto. no such luck as I’m the bringer home of insurance.

        cobra? pardon whilst i cease choking – we looked at cobra when my DH was laid off – totally unaffordable.

        yes, i got lucky & could pick up insurance @ my employer (expensive, useless insurance) but that does jack for our kids (step + original) – but that’s a rant for another day.

    • ARP says:

      @JGKojak: Government healthcare is socialism and socialism would allow employers and employees to effectively compete for the the best talent and highest wages because they are not tied to a company only for…wait, what?

      I hope that people will realize that some forms of “socialism” are actually good for competition.

    • pupu says:

      @JGKojak: Stop outsourcing jobs. Its actually not hard. Just require goods manufactured to meet labor/wage/environmental threshholds.

      I’ve heard people suggest this before but it just won’t work. Tomorrow, lets say we tell China that we will simply not buy any product that is not produced under these specs. We can’t even prevent childrens toys coated in lead paint from being imported. How on earth can we assess and monitor the origin of every item that is imported? We can’t even enforce these standards here at home. It is a nice idea, but it won’t work.

    • MissPiss says:

      @JGKojak: I have medical benefits through my job..and Im still in debt from a surgery I had last year. God forbid I have my first child through my insurance, I will be in debt for the rest of my life!!! I should’ve never went to college and got a good job damnit! I shouldve been a Medicaid girl!

      • pupu says:

        @MissPiss: I should’ve never went to college and got a good job damnit! I shouldve been a Medicaid girl!

        But then you wouldn’t get to go to work so you can pay your med bills and at the same time pay for medicaid girls medical bills while she sits around watching judge judy. What do you want her to do? Work as hard as you do?

  14. Anonymous says:

    “We’re in trouble when none of the possibilities for recovery are particularly palatable.”

    Maybe this country should do the one thing it hasn’t tried yet: lowering taxes.

    If the citizens have to give less to the gov’t, then they have more to spend on products that businesses sell.

    If businesses sell more product they’ll have more money to expand their business and hire more employees.

    If they hire more employees then they’ll create more taxpayers.

    If there are more taxpayers then the government will have more money.

    This works EVERY time it’s tried. However, the Democrats either can’t see it, won’t see it, or refuse to see it.

  15. RobertBaron says:

    Basically, WWIII is the inevitable hard reset.

    • The-Lone-Gunman says:

      @RobertBaron: I suspect that you could be right.

      Listening to all the talk about reducing carbon emissions and bringing up the Third World to Industrialized standards plus growing/emerging economies in China, India and the former Soviet Bloc nations–all competing with established markets for raw resources and energy that are not infinite–if you consider Earth as a whole as if it were a business, the only way this can all happen is if headcount is reduced.

      Historically, Earth Inc has done this in two ways:

      Pandemic fatal illness and…


  16. Kimberly Gist-Collins says:

    What would happen if we let the economy do its own thing instead of trying to pretend like we have some sort of control over it. It actually seems like a positive thing that people are saving more and buying less. Maybe our economy needs to adjust to that so that we can have a more stable economy with less debt, etc… over the long run.

    • krom says:

      @Kimberly Gist-Collins: Buying less means less jobs means less money to save.

      Yeah, I’d say our economy needs to adjust. Fundamentally. For starters, let’s stop having imaginary money.

    • grapedog says:

      @Kimberly Gist-Collins: Letting the economy do it’s own thing is a free economy, which we do not have. We have too much government regulation in some areas(Telco and Cable monopolies for example) and not enough regulation in other areas(Banking and Finance for example).

      The market was trying so very hard to sort itself out…but the government decided to intervene. There would have been a large, tough, bankrupcy period as millions and billions of dollars of made up money vanished since it didn’t REALLY exist. Many shady or poorly run companies and banks would have crumbled, jobs would be lost….

      But it would have been quick, like pulling off a bandaid. Instead, we have this slow peeling off, and it’s a MUCH worse pain/prolonged period of economic craptasticism.

  17. Tzepish says:

    @panzerschreck1: Unfortunately, many have no choice but to bet their life on it.

  18. psyop63b says:

    “Inflate those debts away.”

    And suckers like myself who actually SAVE their money get to see the buying power of their savings evaporate.

  19. hi says:

    inflation is a hidden tax.

  20. Hybriddeathdealer says:

    The American News Media never does it’s homework. They pontificate a lot by surviving almost exclusively on news press releases. Unfortunately Americans are worse. They just quote what they’ve seen and agree with. You tell a Democrat that the problem today is our politicians are corrupt and the democrat will tell you, “yes, but theirs are much much worse!” If you tell a Republican that the problem is corruption, they will tell you, “yes, but theirs is much much worse!” Why am I talking about this here? Because aside from what caused the death of capitalism in 2005, both Administrations met with “Leading Corporate Executives” at the Whitehouse first with Bush in late 2008 and now with Obama in early 2009. Both Administration’s leading concern was with deflation like in the first big depression. So what do you think was asked of those Corporate Executives? If you do the math, all the beginning of the 2009 year even with gasoline prices going back up again, shipping charges and gas has been much cheaper than it was last year, during the ‘Drill Baby Drill’ campaign. Yet prices have risen steadily across all areas, despite costs going down. Their can only be one answer, just like Oil prices were artificially inflated, America’s stores have been creating an artificial inflation. Obama and Bush both were hoping that they could ‘reboot’ the American economy at the current levels and move on. Problem is economics don’t work like that. The only way to get things right is to allow prices to deflate until they right themselves with demand. Meanwhile, companies continue to flounder and without the trust of the World’s investor’s, because our Government is ignoring their pleas to fix our regulatory system, no cash is flowing back into the American economy. Essentially America is running on empty, and the political landscape is being fueled by corruption and greed. Expect more from your politicians, expect honesty and integrity and that’s what you’ll get. Expect them to be corrupt and expect greed and that’s what you’ll get. Personally I want all politicians with any kind of political (Corruption.) experience thrown out. America needs good, honest people to stand up and take back what has been taken from us. It’s time to switch to a ‘Star Trek’ *like* economy. That will never happen, because American companies and Americans in general like being predators.