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Wednesday, November 28, 2012

The Obama Economy: Thanksgiving Week Spending in U.S. Lower Than 2009 Levels

By Susan Duclos

Daily layoffs, business closings, monthly mass layoffs and a variety of reports for states that make WARN notices public, all show a very weak Obama economy on the brink of another recession, whether Washington manages to come to some agreement on the so-called fiscal cliff or not. If they do manage some "grand bargain" as it is referred to, then the upcoming Obama recession might be pushed back a year or two and if they do not it will hit earlier.

Another indicator of a flagging recovery comes from consumers and Gallup just released it's Thanksgiving Day week spending report which finds that spending in the week ending Nov. 25, including Black Friday weekend, is lower than 2011, 2010 and 2009.

Under the implications Gallup offers caveats, it "may" be that consumers shopped early, it "may" be the fiscal cliff showdown worrying consumers, shoppers "may" spend more later... but the raw data, the numbers themselves show a decline that was predicted by conservatives when warning the country that the $800+ billion "stimulus package" would do nothing more than create an illusion of a growing economy.

 Self-reported U.S. consumer spending in stores, restaurants, gas stations, and online averaged $67 per day in the week ending Nov. 25, including Black Friday weekend. This is down from $83 a year ago and the $79 comparable for 2010, and essentially matches the 2009 weekly comparable of $69.

Those numbers are for the week ending Nov. 25, 202, but the weekend numbers are even worse:

Even as the nation's retailers heavily promoted early sales on Thanksgiving Day, consumers' self-reported spending averaged $54 over the three days ending on Thanksgiving this year, compared with $67 in 2011. Black Friday weekend also showed a substantial spending decline in 2012, to $84 from $103 a year ago.

The $800+ billion stimulus bil that Obama and Democrats jammed through Congress when they had full control of the House and the Senate with Obama in the White House, propped up the economy without addressing unsustainable entitlements or the root cause of a failing economy. It gave the illusion of growth.

No nation can spend and borrow their way out of debt and into health without addressing the underlying issues that caused the recession to begin with.

Here is an analogy of what the stimulus really did.

Imagine a business, managed badly and failing, on the brink of bankruptcy. An investor pumps a million dollars into that business but no changes are made to how the company is run, nobody addresses the bad management, overspending, or debt. The doors stay open, payroll is met for a while, but when the money is gone, the illusion fades and that business once again fails.

They don't learn though, as of mid-November, Democrats were already pushing for more stimulus in the upcoming reduction-deficit package.

Yes, more stimulus, which means more spending, in the same sentence as deficit reduction.