Without consumers to lead the charge, an economic recovery will be hard to achieve. And yet everyone agrees that we need to start saving more. So should I buy to stimulate the economy? Or should I save the money in order to “grow” the economy and provide for my own old age? I can’t do both.
This is the dilemma that 30 years of Reaganomics (the real Reaganomics — keeping the economy overstimulated with huge deficits and irresponsible [lending and] borrowing — not the fantasy Reaganomics of government run like a family and tax cuts that pay for themselves) has left us with. So what do we do? The nearest thing to an actual plan seems to be something like this: stimulate first, to avert various short-term disasters, and then — at some signal from the Treasury Department — turn around and start saving like mad, to avert various long-term disasters. In other words, we need to get back our consumer confidence, and then lose it again."
--Michael Kinsley
published Friday, November 14, 2008
The New York Times
page A33