Exactly the point! During the earlier years of the forced redistribution, the economy will appear to do better when measured by the spending.... and of course politicos love that "look". But that's just taking assets from one hand and consuming them with another. Eventually, we WILL "all be poor"... and there will be very little opportunity for success in the future for our kids and grandkids' generations. THAT is the misery of Socialism! What made America a great economic power was CAPITALISM... an incentive for those who can, to DO... to innovate, make products, build a company and employ people. In Capitalism, there is "unequal sharing of the fruits". In Socialism, there is "equal sharing of the misery".
The less wealthy are all pretty much tapped out. So even if you give them a load of cash I can't see how they can spend it, instead it will just go to paying off debt.
I've lived in both Korea and Japan. Speaking from personal, first hand experience, the savings rate of the average man on the street was/is at least 30% of annual salary. Single Japanese women at one time (1980's/1990's) had the single highest savings rate in the world. I spoke with many people regarding savings as coming from America, I simply didn't believe it. When I expressed my surprise at this figure to my girlfriend (future wife), she seemed amazed as she herself saved 40 - 50 % for years on end. She expressed disbelief when I told her what the average savings rate of my friends was, i.e. mostly 0% maybe 8 - 10%. How many 20 year old's in the US do you know who have saved 30,000 USD, NOT from Daddy or from having some sort of specialized skill set, but from working normal part-time clerical jobs etc. 5,000 - 8,000 a year adds up really quick when you don't spend a dime of it. The above is completely foreign to the average US citizen. It was for me.
I wouldn't be surprised to see Gummint encouraging them to spend, "for the economy"... and rely upon help, bailouts, debt relief to assist in defaulting on obligations. Paying down debt is very deflationary... especially as much as consumers have now.
The value of a new car goes down the day we drive it home.... We buy an old house and expect it to go up in value at once.... Everyone bitches about the savings rate of the country.... A vast amount of the economy depends on the consumption of questionalbe goods..... People talk about a coming depression while standing at Starbuck paying $4 for a cup of coffee This is a great country, LOL....... SteveD
Only problem with that theory is that gold DOES NOT hold its value. An ounce of gold today - despite a bubble-like run-up - despite "the worst economic crisis in 50 years" - has *less* purchasing power than it did 300 years ago. Or two hundred years ago. Or even 35 years ago. Etc. Gold has too few practical uses, and is too easy to confiscate and control, to be a useful hedge for those rare times the shit well and truly hits the fan. Cheers.
The value of the dollar is at bubble heights right now. When it comes back to earth, gold's price will adjust accordingly. The government and Fed can't allow the deflation to persist or they'd find themselves trying to pay off $15 or $20 trillion of debt in deflated dollars. Therefore they must do what ever they need to do to rekindle inflation, and then try to prevent it from turning into a hyperinflation event.
well, living in europe, I dont see the need for creditcards. You can just pay with cash or debit cards, which I have done all my life. creditcards are just not necessary and I dont see how it could get so popular in the US.