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A Matter Of Opinion

The vicious economic cycle

A recent article notes that it will be difficult for the economy to sustain a recovery if people continue to get laid off, furloughed and save money, rather than spend it. Of course, they’re saving the money out of uncertainty over their futures.

A WSJ article notes that up to 70 percent of business owners/managers are considering more layoffs and furloughs to help with their bottom lines until the economy rebounds. Of course, this will impede the recovery for the aforementioned reason.

“Consumers just don’t have the financial firepower to go out and spend more,” said Mark Zandi, chief economist at Moody’s Economy.com. “Unless businesses curtail their job cuts, the recovery could very well peter out.”

Anyone see a way out?

 


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