Think again! The US economy is very fragile. Why? Because it is fast becoming a plutonomy. That’s an economy that depends on how the wealthy spend and invest. A far less stable economy then one based on an equal distribution of income and mass consumption.
In a Wall Street Journal article by Robert Frank, he states: “According to new research from Moody’s Analytics, the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments. By contrast, the bottom 80% by income account for 39.5% of all consumer outlays.”
In other words, our economy is more dependant on a very small, RICH percentage of our population for it’s health and stability! When we have the rich spending (because they can) and the rest of us struggling to stay afloat and paying our bills so we’re spending less, that’s a recipe for an instable plutonomy. Why? Because even the rich can’t keep spending forever! They too will eventually have to draw upon their savings and according to the above mentioned Wall Street Journal article, a report by Moody’s Analytics says that the rich are saving less!
So, President Obama, we are wise to this delimma and know that our economy is NOT on the rebound. You need to help us even out the jobs, income and interest rates so the majority can once again spend, invest and save to make our economy a healthy, stable and equally distributed across the board one, once again!