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Monday, October 11, 2010

Does Government want people spending or not?



You hear constantly from government and mainstream news that the way we will be getting out of the recession is through increased consumer spending.   The logic goes as follows:  People buy more products and services.. companies take that money and invest in hiring new workers and increasing inventories..  these workers make money which they use to buy things and eventually you get yourself back to a sincere recovery (which is different than presently, which is a non-recovery).

So that's the government mantra-- spend, don't save.  Yet... 

From AP-  Senior Citizens Brace for Social Security Freeze- "Seniors prepared to cut back on everything from food to charitable donations to whiskey as word spread Monday that they will have to wait until at least 2012 to see their Social Security checks increase.The government is expected to announce this week that more than 58 million Social Security recipients will go through a second straight year without an increase in monthly benefits"



If there is one group that needs a living increase above all others, its Seniors.  And statistically, this demographic (along with those receiving Soc. Sec. due to disability) are the least likely to have any savings at the end of each month.   So if a Senior is getting a monthly check of say $1200/mo, in all likelihood 100% of that total is being re-circulated back into the economy.  And if they received an increase of say 2.5%, 5% or even 10%, realistically that increase would be fully spent as well.  That means money that goes into local businesses which provide local products and services and are able to hire more workers so their businesses can expand to suit their customers' needs.  That's a direct benefit to small businesses and communities as a whole.

The government does not get this..  or they simply do not care.   They will help Goldman/Sachs.  They just have no interest in helping anyone named 'Goldman' or 'Sachs'.  They want people spending money and consuming but they want it to occur through acquiring more and more debt.

I've stated this repeatedly because it is so important people understand this truth- the government does not care about you as a person; whether you live or die, thrive or survive.  You are supposed to work, consume, pay taxes and obey the law.  Beyond that, you do not matter to them.

But the truth is this- you DO matter.   You matter to your family, loved ones, friends, neighbors.. You matter.

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