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As Employment Benefits Run Dry...



November 04, 2009 – Comments (2)

Financial Armageddon has an interesting post on consumer spending, saving and income.  Spending hasn't dropped off nearly as much as wages and it is suggested employment benefits are bridging the gap.

That means that as people lose benefits the potential for reduced spending is significant. 

One of the things I always thought was holding Vancouver's economy back was the disposible income had declined so much with local people, all business could do was struggle.

2 Comments – Post Your Own

#1) On November 05, 2009 at 7:23 AM, alstry (< 20) wrote:

We have simply shifted borrowing from the consumer borrowing to spend into the government borrowing to give the consumer money to spend.

We have about 40,000,000 people receiving food stamps, 15,000,000 people receiving unemployment benefits and a deficit approaching $2 Trillion dollars per year......about the size of Canada's economy and half the size of China's economy.

The magnitude of this deficit is simply unsustainable as now much of it is self funded or printing.  It is without a doubt the single most important economic issue facing America...and maybe the world.

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#2) On November 05, 2009 at 6:09 PM, dwot (29.67) wrote:

Looks like another bandaid to the problem, saw in the news today benefits extended 14 weeks in a number of states and 20 weeks where unemployment is over 8.5%.

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