Archive for May 6, 2010

The Political Economy of Consumption: ‘Tis Better To Give, and Give, and Give

Here is why deficit reduction is so hard: Politicians get reelected by encouraging spending, not savings. Supporting policies that reduce current consumption—either by government or households–rarely gets anyone elected to anything.
Not to stereotype, but nations do have personalities. Italians eat. Russians drink. Americans spend. And when anything—or anyone—gets between us and our consumption, watch out.