“Federal Reserve policy makers said last Wednesday that the recession appeared to be hitting bottom. Among the end-is-near indicators was consumer spending, which they said had begun to stabilize.”
-NYT 16/09/09
Quite right.As joblessness increases or at least not showing signs of decreasing,spending will be less-less demand.At the same time, stimulating the economy with out clearly identifying the area for spending shall fuel inflation,for example spending on non essential goods.It is also also pertinent to note that spending anticipated income based on present needs or expenses, mostly avoidable, must be curbed.In other words, plastic money culture must slowly give way to good old system of spending ‘what you have less savings’. Unless this fundamental concept is adhered to, inflation shall lead to deflation and deflation to inflation, the cycle shall continue.High incentive for savings shall go a long way in bailing out economy.
Tag: comments NYT
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Economic stimulus- priority.
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