We're spent.

[groovedaddy]

THERE is no shortage of explanations for the economy’s maddening inability to leave behind the Great Recession and start adding large numbers of jobs: The deficit is too big. The stimulus was flawed. China is overtaking us. Businesses are overregulated. Wall Street is underregulated.

But the real culprit — or at least the main one — has been hiding in plain sight. We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making.

The auto industry is on pace to sell 28 percent fewer new vehicles this year than it did 10 years ago — and 10 years ago was 2001, when the country was in recession. Sales of ovens and stoves are on pace to be at their lowest level since 1992. Home sales over the past year have fallen back to their lowest point since the crisis began. And big-ticket items are hardly the only problem.

The Federal Reserve Bank of New York recently published a jarring report on what it calls discretionary service spending, a category that excludes housing, food and health care and includes restaurant meals, entertainment, education and even insurance. Going back decades, such spending had never fallen more than 3 percent per capita in a recession. In this slump, it is down almost 7 percent, and still has not really begun to recover.

http://www.nytimes.com/2011/07/17/sunday-review/17economic.html?nl=todaysheadlines&emc=thab1

[PDJane]

1. All of those things are problems, yes,

But the problem is the lack of enough taxation to run the government and tax breaks for offshoring.

You can't run the economy that way, and that is why the bust. The whole economic system needs to be re-built, with main street as the focus, and not excluding minorities and women.

The hand wringing bothers the hell out of me, because the focus needs to be elsewhere.

[groovedaddy]

3. I agree with your assessment. But it's extremely difficult to get entrenched power holders to

consider such an option. There has to be a massive public push to make it happen.

[BeFree]

2. Most spending comes from 3 types

The mass of people spending.
The few rich
Government

Government is the big spender. Problem is a lot of that spending is going into pockets overseas.

If those who are hoarding (a DU OP claimed that 29 companies had more cash than the US Treasury) start spending it will help. If the mass of people could spend it would help.

But your premise that the spending bubble has burst is dead on.

[orwell]

4. Consumer spending has slowed...

because the last source of financing consumption, the house as ATM, has collapsed.

Because of the global assault on the middle class through outsourcing, relentless inflation, stagnant wages, jiggering of the tax code to funnel wealth to the top, abandonment of anti-trust prosecution, and a host of other predominately Republicon led initiatives, the American consumer is not only tapped out, but in debt up to his eyeballs. You can't get blood out of a turnip.

The powerful interests are praying that the 2 billion consumers in China and India will now begin pulling the consumer wagon. The American consumer, the oxen that has pulled the cart for decades, will now be shown the slaughterhouse floor.

The king is dead, long live the king.

[Ragnarok]

5. My mother...

...in her 70's now, showed me her budgets and books from the 1970's and 1980's sometime back in about 2009. She keeps everything and these were still in a filing cabinet, though the paper was quite yellowed. Man, my parents were tight-wads! They didn't buy crap! They didn't make much between them and still saved half their money - 1 car, no cable TV, push mower (used), local vacations, paint your own house, no dinners out, change your own oil, etc... Dad's dead, but Mom is doing well in semi-retirement. According to her, it's only because they saved their money - SS is largely a insignificant in paying the bills. Oddly, I didn't know anything was wrong with any of those things as a kid in the 70's and 80's.

Anyhow, I decided I should be more like they were. Do I need 2 or 3 TVs, 2 or 3 computers, Netflix and DirectTV, the unlimited texting plan, etc? Not really. Thus, I'm probably part of the current problem - I'm not buying a damn thing I don't need!

[damntexdem]

6. The U.S. gave away most of its manufacturing base, and the rest of the world ...

depended on the U.S. as a consumer market. A bit ironic, no?