Earn What You Spend

I’ve written before about the paradox of thrift we now face; we desperately need to reign in our debt-fueled consumption.  Not because there is something bad about consumption, but rather because we have been spending money we don’t have.  That is, plain and simple, unsustainable.  I noted a couple of months ago: 
Our financial system is [...]

We should be roundly surprised at the number of individuals who spend more than they earn, but living within your means has gone distinctly out of fashion in the past decades.  So when we hear of the massive credit card, auto, and mortgage debt accrued by friends and family alike, we aren’t surprised in the [...]

Nouriel Roubini joins the ranks of those concerned about the drop in consumer spending [via Clusterstock].  It has certainly occupied my mind of late (see here and here most recently).  Roubini gives us twenty reasons why we are seeing the American consumer drastically pull back in their spending.  The first reason of course catches my eye as the [...]

In yesterday’s NYTimes, David Leonhardt has one of the best articles about the slowdown in consumer spending I have read.  It is pretty widely agreed that this slowdown is one of the more serious challenges currently facing our economy - with consumer spending making up two-thirds of our economy, every drop in total consumer spending [...]

The paradox of thrift is a phrase that, having traded economics classes for philosophy as an undergrad, I just recently learned.  But it is the exact explanation for the downward cycle of consumer spending we are in. 
Last week, Paul Krugman wrote an excellent article outlining much of what we have been discussing here in the past [...]

Yesterday, expected but still unwelcome news hit the market: real GDP fell by .3 percent in the third quarter of 2008.  According to the Bureau of Economic Analysis:
the decrease in real GDP in the third quarter primarily reflected negative contributions from personal consumption expenditures (PCE), residential fixed investment, and equipment and software that were largely offset by [...]