Prudent American’s Taking Care Of Business, But Will Be Back

Thanks to Keith Franco, a new contributor for this great submission.  Attached are his comments, and a link to the article.

The article, in a nutshell, illustrates that the buld of American’s live within their means, are now in a holding pattern, paying off bills, saving etc… but will eventually return to retail spending.  It lends credibility to why we all think the sky is falling because nearly every news-story regarding an American consumer is one of suffering, loss, and living outside their means.

Keith’s editorial:

“A different perspective on the situation, though I think he’s underplaying the possible effects of rising unemployment. I also think that he’s painting with overly broad strokes; that you’re either low income and in over your head in debt, or you’re not. I think there are plenty of shades of gray in between there, with a good number of folks who simply have uncomfortable, but not menacing, levels of personal debt. That, coupled with the very real threat of losing one’s job these days, ought to lead to most everyone with such levels of debt, to pay it down.

Interestingly though, his conclusion is not markedly different from that of any other economist…

More sour mortgages threaten to plunge banks into insolvency, but hundreds of millions of consumers have already been paring back their spending, paying off debt and boosting their savings at rates not seen in the history of record keeping. Once they regain some financial stability, they will undoubtedly begin consuming again, pushing the economy forward, with less giddiness, but with the prudence that most have had all along.”

Link to story:

http://www.newsweek.com/id/184620/output/print

Tags: economic news, good economic news, Positive Economic News