The collapse of aggregate demand in the US consumer sector since 2007. It’s bad… Really, really, really bad.
Welcome to the Land of Austerity. This is what happens when you cut spending during a recession. This is what happens when you lay off or force out public sector workers. This is what nobody could have predicted (except all the Keynesian economists who warned us again and again and again that this is precisely what would happen).
It’s hard spin this as anything but dismal… Real consumer spending is down 8% in real dollars. This is why, like the Federal Reserve is the bank of last resort, the government is the spender of last resort. And when the spender of last resort is hog-tied in the back room by a bunch of know-nothing, asshole Teabaggers like Eric Cantor and Paul Ryan who think that Hayek or maybe Ayn Rand will save the nation, we get to live the nightmare.
From The Economist:
Between 2007 and 2010, average annual consumer spending per unit—defined as a family/shared household or single/financially independent person—fell by 3.1% to $48,109. Average prices over this period have risen by 5.2%, so real consumer spending has fallen by almost 8%.
Maybe this will help! Just stare at this picture for a little while and you’ll feel better. Trust me.
Thanks for the cute kitteh pic. You’re right. I do feel better. And thanks too for the very satisfying opportunity to vote Ryan and Cantor down. We can’t boot those idiot dirtbags out of office fast enough.
You nailed a critical part of the crisis. I tweeted MuttMutt’s tweet. We also have to quit buying stuff off shore, that’s made from child-labor, virtual slave labor, and workers who don’t make enough to buy our exports.
A very Carl Sagan-esque post.
But seriously…clearly, lack of demand can be combated with spending cuts and layoffs. That’s just commonsense.
OK, so that wasn’t serious either.
It blows me away how you currently have an economy that’s based 70% on individual CONSUMPTION, and then righties are trying to still spread this lie that lowering people’s wages and benefits, and their abilities to consume, will somehow grow the economy.
Great chart, and apparently we need to teach the average Wisconsin suburbanite this lesson by seeing our economy tank after slamming public employee salaries. Oh wait, we’ve lost 19,300 jobs in 3 months, so I suppose we’ve already seen it.