Friday, September 28, 2007

Americans just can't stop spending themselves into oblivion

WASHINGTON (AP) -- Consumers shrugged off a rash of bad news to spend more than expected in August while a key measure of inflation eased to the slowest pace in 3 1/2 years.The Commerce Department reported Friday that consumer spending rose by 0.6 percent in August, the best showing in four months and better than the 0.4 percent increase that had been expected. Incomes rose by 0.3 percent last month, slightly lower than had been expected.

Excuse me? Incomes rose 0.3 yet spending rose 0.6? HUH? I'm sorry what was that again? I wasn't a math major so this is a little hard for me to understand. Oh I get it now, Americans just borrowed twice their raise and went on a shopping spree.

Is there anything more American than maxing out the Visa on a day at the mall? Anything more says USA, USA than buying that new $45K truck with $0 down? I'm getting a little misty at the thought of the red, white and blue waving through the air while you're signing your name to yet another $1,000 of 18% credit card debt.

But, but, but the economy depends on us spending. So say the experts. Sure, spending what we have less a little for savings, great. Spending by borrowing.....not so good. Horrible actually.

As for this inflation number. Yeah inflation is contained I suppose. Plasma TVs are cheaper now than a year ago. But milk is anywhere from 20-30% more. Gas is more expensive. Natural gas is through the roof. Wheat is at an all time high. So if you need to buy a new plasma, inflation is working wonders for you. If you need to eat, drive or heat your home this winter....

1 comment:

christine said...

I have to say Ed, I couldn't agree with you more.