Consumption spending is 70% of GDP — so what?

Independent Institute
by Robert Higgs

09/05/10

At first glance, this journalistic commonplace appears to make sense. Anyone can understand that, say, a store at the mall will not hire additional employees unless its sales increase enough to justify the additional expense. Hence, would-be employees will remain unemployed; they will purchase fewer consumption goods than they would have purchased if they had jobs; and therefore the stores will not hire more workers; and so forth. The circle of a theory of income and employment seems to be closed, and thus an explanation provided for the lingering recession: consumers are not spending enough. One does not need a Ph.D. in economics, however, to discover that something must be wrong with this way of thinking about prosperity and recession...

http://www.independent.org/blog/index.php?p=7693



The path to a high-wage society

The American Prospect
by Peter Dreier

09/03/10

American workers today face declining job security and dwindling earnings as companies downsize, move overseas, and shift more jobs to part-time workers. Last year, a survey by the Economic Policy Institute found that 44 percent of American families had experienced either the job loss of one or more members, a reduction in hours, or a cut in pay over the previous year. For the vast majority of workers, the costs of basic necessities are rising faster than incomes...

http://tinyurl.com/2ae38va


Informant: Thomas L. Knapp



http://freepage.twoday.net/search?q=recession
http://freepage.twoday.net/search?q=consumption+spending
http://sharenews.twoday.net/search?q=GDP
http://freepage.twoday.net/search?q=unemploy
http://sharenews.twoday.net/search?q=jobless
http://sharenews.twoday.net/search?q=Robert+Higgs
http://sharenews.twoday.net/search?q=Peter+Dreier

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