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Economy Contracts, Spending Turns Negative

This is not a consumer driven recession. Consumers have been stripped of their wealth by special interest driven legislation, wars, unchallenged illegal immigration, cheap foreign labor, offshore manufacturing, and predatory lending practices by financial institutions.

Too much of consumers' money is going to pay interest. Government legislation, the Fed, and the banks have stripped consumers of their wealth. The economy will not recover until consumers do. Lowering the interest rate and throwing money at banks and other corporations is not going to fix the problem. It is only going to make matter worse when the resulting inflation sets in. Banks are going to have to take their lumps along with everyone else. To reduce the severity, banks need to lower interest rates on credit cards, mortgages, personal loans, and lines of credit. Congress also needs to stop fooling around with things that stimulate the economy like tax credits for renewables and they need to stop bringing cheap foreign labor into the country.

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