A Crisis of Confidence in Government Can Harm U.S. Economic Growth
A Crisis of Confidence in Government Can Harm U.S. Economic Growth by Pam Martens and Russ Martens – Wall Street on Parade
When the Commerce Department released its data on April 28 for Gross Domestic Product (GDP) in the first quarter, it signaled the slowest growth in three years. The economy had grown at a tepid 0.7 percent annual rate as a result of weak consumer spending. The individual consumer matters greatly to growth in the U.S., accounting for more than two-thirds of economic activity. In the first quarter, consumer spending registered at a 0.3 percent rate, a pace not seen since the depths of the financial crisis in the fourth quarter of 2009.
It is perhaps ironic that the 1 percent in America control Washington through lobbyists and a perverse campaign finance system but the 99 percent, the consumers, control the economic fate of the country. If consumers lose confidence in the country’s leadership, they will retrench from spending in order to build a larger cash safety net for a potential downturn.