From USA TODAY:
Households have whittled down the massive debt they racked up in the mid-2000s credit bubble, but apparently not enough to nudge them into a spending binge that could jump-start the recovery, some economists say.
Household debt is closely watched by economists because consumers burdened by big monthly payments for mortgage, credit card and student loan obligations are less likely to splurge on clothing, furniture and travel. And consumer spending makes up about 70% of the economy.
Many economists expect the government to report Friday that the economy grew at a moderate 2.5% to 3% annual rate in the first quarter, driven largely by exports and business investment. Consumer spending likely rose a more modest 2.1%, according to IHS Global Insight…
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EDITOR: Three points, as have been pointed out before:
1) It is the massive consumer debt more than government debt that deters recovery. Only a policy encouraging inflation at about 2% a year will enable debtors to dig out of the whole. We seem to be seeing this now.
2) Our current university systems are archaic, holdovers from the Middle Ages, and need to be reformed to take advantage of the Internet and thus cut costs to students in half.
3) Certain professions, such as engineering and medicine, should be subsidized if not totally underwritten by the government. In turn, the health care system needs to become ‘single payer’ as are other advanced nations and financed via a Value Added Tax rather than through employer and private insurance.
