Flatlining GDP is Our Fault

grizzly1911

kabayiri wrote: »

A sustainable future is not necessarily an impoverished one.

A car made to last 10 or 15 years generates a tremendous amount of ongoing service and repair business.

The cash for clunkers scrappage scheme took many serviceable vehicles off the road. Their replacements took a lot of energy to produce.

I think the consumerist society was a corporate vision.

The car example is spot on. Yes we need improved models but taking perfectly serviceable and safe units off the road is illogical.

I have no issue with advancement we need to go forward what does bug me is cynical exploitation of those advances. More so when interdependent consumable items or version compatibility is required.

BobQ

Originally Posted by coastline


general public afraid to spend in uncertain
times.

Generali wrote: »

I'm not sure why you keep banging on that drum when we've shown that it isn't true. Saving has returned to an approximate long-term average, in fact if anything people are spending a higher proportion of their incomes than they once did.

Not the view of the ONS.....

http://www.ons.gov.uk/ons/dcp171766_256980.pdf

Household spending began to fall before the start of the recession, despite real disposable income remaining relatively stable (see Figure 2). The counterpart is that households’ saving increased. This may have been motivated by factors such as the emerging financial crisis and associated economic uncertainty.

This higher saving continued when real disposable income increased in 2009. Uncertainties about the future, domestically and internationally, the prospect of higher unemployment and a continuing need to repair over-extended balance sheets may all have played a part in this.

GeorgeHowell

BobQ wrote: »

I agree, but what can individuals do about this? Government cannot do everything either. But while this one has done some good in discouraging a benefits dependency, it is providing no leadership to encourage business or consumers to spend and created a culture of fear and uncertainty that will eventually be counter productive. Blaming consumers is pointless.

I don't think it's about blame, but cause and effect. I will admit that the thread title with the word "fault" was just an attention grabber. Blaming consumers and blaming government are equally erroneous and pointless. I think we have to accept the likelihood that the sudden change in spending and saving habits was indeed perpetrated by the crash. The only thing that will stimulate business confidence is increased consumer demand, government words will make little difference unless they see the footfall increase or the order books start to fill. I don't accept that government has created a climate of fear and doom, they have created a climate of reality that you can't go on increasing the public debt forever. There are no doubt a number of complex reasons why people are still saving more instead of spending more, but whatever the reasons until and unless they change that the slump is not going to end as soon as it might.