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Age of Austerity

Aug 02, 2011

The age of stimulus spending has hit the brick wall of austerity today. One may argue over whether we should continue the stimulus spending or go for austerity, but for us on main street it is more helpful just to know how the new austerity measure is going to affect us.

The overall issue is whether the government should borrow more money to inject into the economy, or if we should stop borrowing so much money because of the debt load. Neither side is debating the repeal of the Federal Reserve Act, so the Titanic is still on its way to the bottom of the Atlantic. We, however, have to decide how to survive the austere times ahead.

Here is an article that reflects the same thought process:

http://wallstreetpit.com/80568-2000-for-an-ounce-of-gold-seems-like-the-only-bet-worth-making

It’s pretty clear that the economy will be in a slow growth state for quite some time and the most important economic statistic to follow will be consumer spending. We know that the economy is going to be lackluster for the next several years, because government spending will continue to be reduced, putting pressure on any income growth.It’s the age of austerity and it’s going to last for quite a while.

In other words, for too many people there will be a shortage of money, which is called "recession."


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Dr. Stephen Jones


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