There's an awful lot of talk about how to fix the economy. Throwing money at it seems to be the government's solution. Charles Osgood on CBS yesterday chastised Americans for not spending, because hording our money just worsens the situation. The Federal Reserve thinks the answer is lowering interest rates so banks can get easy money that they refuse to lend.
I've thought about this a bit, and I think there is merit in all the above, but that each and every one of them misses the boat because they leave out the KEY element. The connection between Consumers and Markets.
Consumerism drives our economy. People make things, people sell things, people buy things, people fix things, people buy things to make things... nice little circular "ecosystem",(Let's leave those asshats called "speculators" out of this for now - that's a whole 'nother ball of wax) and it all works.
Until some idiot comes up with the bright idea of outsourcing jobs to 3rd world countries.
Laying off people who make things.Laying off people who fix things.
Which means there are less people who can buy things.
So nobody buys things.and nobody can sell things so they lay off people who sell things.
Which means even MORE people cannot buy things. so nobody makes things.
So they lay off MORE people who make things...
Not to mention that all these people are now collecting Govt. benefits because they don't have jobs and NOT paying taxes because they don't have jobs... And of course, they only spend their benefits on the BARE ESSENTIALS, because they don't have jobs...
Clearly anyone with 1/2 a brain can see how this turns out. Laying off people clearly is the prime reason why the economy sucks tepid pond slime and will continue to do so as long as Corporate America decides that their dividends and profits can be saved by "cost cutting" measures like downsizing workforce, outsourcing and layoffs.
Put people back to work. Now there would be that many more people who CAN buy things. So you'll need even MORE people to make, fix, sell, etc. things.
Really - I'm fair certain even a 10 year old could grasp this...