Consumer Spending

Everyone seems to agree that consumer spending is the quickest way to economic recovery, but consumers are holding back.

"You're not going to get a recovery without a faster pace of consumer spending," said Alan Levenson, chief economist for T. Rowe Price Associates.

During some previous recessions, shoppers resumed buying such big-ticket items as appliances, cars and houses despite flat salaries. The difference was that credit was much more available to consumers than it is now.

-Shoppers 'Sidelined' In Long Retail Slump

Everyone needs to rethink their views on economic recovery.

The current lack of credit isn't the problem. Consumers going into more debt won't help. Savings and a lack of credit are necessary adjustments that should have happened long ago. It was the abundance of credit that caused this problem in the first place. Car manufacturers opened to many factories and produced to many cars. Retailers opened to many stores and hired to many people. It was all based on credit - so much credit that it was impossible to sustain. Now these businesses need to deflate to the size they should have been and learn how to survive with fewer customers. Consumers need to pay off their credit cards and start saving for the future. The economic recovery will be slow and painful, but it needs to happen. Let's give the market a chance to fix things instead of having the government try to reinflate this or that bubble, or create a new bubble to take it's place.