Consumer spending has been for decades 70% of the economy but new numbers put that at something closer to 60%. The obvious answer is that the difference is now being made up by government spending but that doesn’t reveal the real problem.
Consumers have dropped out of the middle class by the tens of millions and simply don’t have much more to spend than for subsistence needs. This has been masked over the last 30 years by ever increasing debt where instead of paying workers a living wage, American corporations have created a giant company store where the worker becomes more indebted the longer that they work. Then selling the debt to China to mask the fact that they aren’t really making enough profit to pay themselves the obscene executive salaries they continue to claim they are entitled to.
Now with real unemployment approaching Depression Era numbers of twenty percent and unions having been beaten and subdued; there is no longer any need to even pretend to pay workers enough to live on. Government spending is keeping the economy going but nothing has been done about out-sourcing so the standard of living will continue to decline as even more jobs are exported. Businesses that depend on the middle class will continue to decline, laying off more people and driving consumer spending ever lower and around and down.
Americans have come to accept the idea that roughly 300,000 people should own everything. Incredibly they still see themselves as being able to enter that ownership class. If not by hard work then there is always the lottery or god’s intervention. No real hope that the kids will have a better life then them or even as good. The kids having finished college with crushing debt they are lucky to find a minimum wage job and are one more bad month from living in the folks basement.
After thirty years of Reagan propaganda many people are fully accepting of this decline or are willing to blame everybody but the people they voted for. The kids living in the basement don’t buy it, but aren’t quite sure what to do about it. Having had schools deprive them of any critical thinking skills or any history they can use; having had a steady diet of misinformation and out right lies from the TV their whole lives; they are close to becoming peasants and serfs. They will have to find the truth themselves or perish.