As I sit here in the early AM pondering our economy, our policies and accepted ethics as a society, I wonder why it is we do not protect the main resource of our economy? We do everything we can to protect and serve the providers of goods and services. We make laws and compensations to encourage them to grow here in the US and per trickle down economics expect our quality of life to grow year over year, generation over generation.
When I consider how our economy is setup, where the main driving force comes from in the equation is the same place it comes from in our political realm, the mass of people. In politics this is provided by each individual providing their singular power to the government to wield on their behalf while they go on living their life as a citizen. In our economy the same is true. But these people are not providing their citizen power, but rather their monetary empowerment as a consumer. In the equation of economy we have established, consumer spending accounts for 70% of our overall economy. This would be a major driver for our growth as a nation and productive power in the world. So then why do we cater our rules and regulations to favor the providers of goods and services over the consumer? To protect our way of life, we must protect the consumer as if they were a endangered species. The idea in a consumer driven society is to keep the consumer consuming. This is not possible when the consumer continually has less and less monetary power to distribute due to mechanisms such as inflation and speculation which lead to the declines of value in the monetary system.
The base concept put into play by the President of my namesake is trickle down economics. Where by giving those consumers with the most monetary resources relief from tax burden should encourage them to spend and invest creating jobs for those with less of the monetary resources. After decades we can see this is not the truth. I sometimes jest with those around me, "Reagan's economic adviser had the chart upside down and just didn't want to admit it." My statement is really based on observation of spending habits amongst those with more and those with less money.
Someone with a large bank of monetary resource tends to be less inclined to spend at the ratios we find in people with generally less of this resource. Simply put the psychologies in play are very different. When people start getting their tax returns at the beginning of the year, sales of goods and services go up. When people have won the lottery, many find themselves broke or worse. How does this happen? Well, as a general population we are constantly encouraged to spend 24 hours a day 7 days a week, minus sleeping hours. It is drilled into our minds to spend if we have the ability to do so. Many times even if we do not. Kind of how we got into the situation we're in currently.
I think it's nice to help the banks and other corporations who are dogmatically inclined to appropriately handle their monetary resource. However, if we intend to get our economy moving, putting people back to work and seeing strong production increases, the general population will require some real and solid relief. We don't base our economy off financial institutions making greater gains on their money loaned. We make it on the backs of the individual. The person waiting for that couple of grand to come in from tax returns or bonuses who is going to run right out and spend it all. Hence, driving the retail and services sectors, further driving the B2B sectors and finally driving the government revenues via taxation.
Just as Clark Griswold learned in Christmas Vacation, you can't put in a pool with a membership to the Jam of the Month Club. Unfortunately, this does seem to be the level of relief offered to the people by its government. The banks and corporations took our assistance when they should have failed. Saving the companies should not be the concern. Saving the consumer developing their confidence and ability to spend should be the focus to save a consumer driven economy.