Wait and see how less the spending will be if the tax cuts expire. I suppose this will be Bush's fault. ----- Original Message ----- From: "dick thompson" <[email protected]> To: "James Anastos" <[email protected]>, "MERLE MCKINZIE" <[email protected]>, [email protected], [email protected], "Michael Kerwin" <[email protected]>, [email protected], "TheAnchoress" <[email protected]>, "gocinatlanta" <[email protected]>, "Jim Miller" <[email protected]>, [email protected], "jane hoffman" <[email protected]>, "John and Beth" <[email protected]>, [email protected], "Boudicca Voice" <[email protected]>, "Tammi's World" <[email protected]>, [email protected], [email protected], [email protected], [email protected], [email protected] Sent: Monday, August 2, 2010 11:16:43 AM Subject: Someone give the Globe a clue bat - why are the rich spending less
Rich spend less, squeezing economy
Associated Press / August 2, 2010
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WASHINGTON — Wealthy Americans aren’t spending so freely anymore. And the rest
of us are feeling the squeeze.
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The question is whether the rich will cut back so much as to tip the economy
back into recession — or if they will spend at least enough to sustain the
recovery.
The answer may not be clear for months. But their cutbacks help explain why the
rebound could be stalling. The economy grew at just a 2.4 percent rate in the
April-June quarter, the government said Friday, much slower than the 3.7
percent rate for the first quarter.
Economists say overall consumer spending has slowed mainly because the richest
5 percent of Americans — those earning at least $207,000 — are buying less.
They account for about 14 percent of total spending. These shoppers have
retrenched as their investment values have sunk and home values have
languished.
In addition, the most sweeping tax cuts in a generation are due to expire in
January, and lawmakers are divided over whether the government can afford to
make any of them permanent as the federal budget deficit continues to balloon.
© Copyright 2010 Globe Newspaper Company.
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