The Spending Consumption is Hurt

The spending consumption is having a real hard time; now it is falling in similar pace of the recession of the 70's and the 80's. The reason are two: the lack of confidence of the American about the future of the economy and the burst of the bubbles. The first will be very difficult to recover because of the uncertainty of economic future. The second is related to the economic impact of the consumers when the prices of the houses and stocks severely fall; many of the people used the present value of these assets to buy things because they waited to pay them with the increase of their goods prices. These assets have been having a positive trend in for many years, but now we know that many of them did not have enough bases. It is possibly the end of one model of highly leveraged consumption.

This macroeconomic indicator is very important for the American economy. It represents more than 70% of the Gross Domestic Product, and it has been exceptionally active since the beginning of the 90's. It helped to have many years of growth not only in the United States but also in the rest of the world.

In my opinion, we will have to wait a couple of years to recover a positive trend again. If we want an improvement in a shorter time, the government has to take policies to recover the consumer confidence; these policies have to be enough clear and sound. In my opinion, the government is the doctor, and the economy is the very ill patient; so the doctor has to give the exact medicine; sometimes the patient does not like it, but he must take it to recover his health. I see the doctor has not acted as quickly as the required situation, so the wrecked economy will not regain health soon.