Student Blog: Law, Markets, & The Role Of The State
ECONOMIC TURNOVER
With programs like Cash for Clunkers and the tax rebate program for new home owners, the economy is slowly turning around. However, recovery continues to depend on US consumers. Consumers need to rebuild their confidence in their personal financial situations and in our country’s economy. They need to break free from the craze that has hit many Americans- excessive saving instead of spending. Americans’ new found diligence in budgeting and cutting back slows down our much needed economic turnaround.
Jeff Gelles describes the current economic state in his 2009 article "Frugal Nation". What led to what Gelles described as the “Panic of 2008-2009” was happy-go-lucky consumers taking easy credit opportunities without reading the fine print and buying inexpensive foreign products instead of domestic goods. Without any worries, most consumers then did not have any kind of emergency reserves.
But then after gas prices and unemployment rates soared and banks had to be bailed out, consumers got scared. Concerned about their uncertain futures, Americans panicked by becoming over cautious and by disproportionately saving- to the point where the US economy was almost at a stalemate.
The solution? Go shopping! Hardworking Americans deserve to spend something on themselves and purchases will help the economy turn around. At this point we should put Precaution on the back burner. It hasn’t done us any good so far.
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