Crisis Diary as it unfolds ….

The spending crisis

Via Calculated Risk

One of the main reasons why this recessions is going to be deep and prolonged is savings rate in US had hit rock bottom and with people losing money all around, you can not expect them to keep spending at the same rate. (besides even if that happens, it will be even more disastrous) That’s why gov’t spending is so very crucial at this point.

This graph says it all,

personalsavingsrate2

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December 24, 2008 - Posted by | Opinions | , , ,

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