Originally posted by zroth
The economy is based on consumption. There are less consumers making money. What happens when there are no working consumers to drive
Correct. This is precisely what has helped get us into this Great Recession. Since the 1980s, American workers were told to take less/tiered wages and
use what was left to pay more for medical, housing, education, energy, transportation, retirement expenses, in effect de facto wage reductions,
working more for less income than they'd had since WW2. This does not even address the increasing numbers of part time workers or multiple job
workers to earn the equivalent of the one job-40 hour workweek, but w/o the benefits.
With this downward pressure on wages, in order to continue to make corporate profits remain the same, Americans in the middle class found a car to be
affordable only if leased, and a house to be affordable to buy only if "creative financing" or interest only mortgages were obtained. If they wanted
anything else that their parents once bought with cash, no problem, there was all this easy money called credit.
Combine this with homeowners told to use their personal wealth locked up in their homes, for medical bills, college education, retirement, emergency
expenses, the middle class went from good savers to huge borrowers. Loss your job, lose your house.
By the 1990s even the poor and downwardly mobile middle class were financially being rescued by the growing pay day loan business. More people to
drain away what little wealth they had.
Interesting, but around the1980s, Americans went from being called citizens to being called consumers. To the point where when we were attacked on
9-11, we were told to do the patriotic thing and "go shopping". And by then, that meant go into debt more.
I can remember my parents telling me of their experiences of the Great Depression. My mother said that there were things to buy, but nobody had the
money to buy them.
Corporations cared less if American consumers could buy, because in this global economy, they could sell their goods elsewhere in the world, like the
growing Chinese and Indian middle class. As long as wealth was transferred upward, who in power cared? We now have a third world economy trying to fit
in with a first world nation.
We won't necessarily have children scrounging in garbage dumps to survive, but on the scale of a first world nation, we'll have our permanent,
wealth-denied underclass (most of us) to make money for those already holding the most wealth.
I think, how can a new college graduate starting off holding $130,000 of education debt pay off the debt earning $10 an hour and go on to help the
consumer economy? They can't, Welcome to the world where Americans are left to scrounge for trash heap jobs.