The main street credit crunch
October 29, 2009 | industry, personal finance | Comments (0)From the story:
Are we clear? The Obama administration has run the federal deficit up to 12% of GDP, handing out money to favored projects. The banks shift their balance sheet away from risky small business to riskless Treasuries. And the grassroots economy gets crushed.
It’s all going to get worse. The personal savings rate is back up from 0% to around 3%, but it needs to go back to 10% and stay there indefinitely, which means that consumer spending has to drop by 7% or more, more or less permanently.
Well, that’s a downer.
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