The flaws of the US and credit economy are now being exposed one by one. The latest evidence to indicate the length of the recession/depression could very well be later than sooner. The caged beast known as consumer spending has now proven it can injure its keeper. The Federal Reserve reported consumer borrowing fell in August for the first time in more than a decade as households, battered by rising job layoffs and the decaying economy, cut back sharply on their use of credit.
Now that consumers are cutting back on their borrowing practices, in this time of despair, will they continue this practice once the economy recovers? Will the government change its policies? The policies of moving more more jobs and industry abroad has left the consumer as the only support in the US. A dangerous path was chosen and now the repurcussions are being felt. What sense did it make to have one segment account for two-thirds of the total economic activity in the US? The time has come for individuals to look after their own business and not worry about keeping up with their neighbors. As it turn out their neighbors had “no clothes” as well.
