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You have to survive

You have to survive
Every day is a battle, survival is rule #1

Saturday, February 27, 2016

Who is the economy?

When people talk about consumers and how they spend their money, they talk as if wealth is spread evenly.  Right now you can hear opinions on gasoline savings and how that is boosting the economy somehow.  not only is the economy staying the same ovrrall, but Its a tiny boost.  I feel like people sometimes forget who the economy is.  There are over 200 million people driving around in the US, so if each person saves 50 or 100 dollars per month, it adds up to a large amount.  I understand that.  Something like 30 Billion dollars that used to go to gas stations is now going somewhere else.  That is a big shift.  As important 30 billion is, it’s a drop in the bucket.  The US federal government’s tax income is over 2 trillion, and the size of the economy is up around 17 trillion.  So 20 or 30 billion dollars is a tiny slice of the pie.  The wealthiest 20% of our population has about 85% of the total wealth.  Im pretty sure the top 20% don’t care about gas prices.  If I am ever asked how something is affecting the economy, I would relate it to what the top 20% are doing.  Rich people are the economy.  The buying and selling pressure in any market is dependent on what rich people do. 

Me saving $80 a month on gas will shift my money to other industries but the overall impact is the same.  If the overall economy looses steam, we go into recession.  And vise versa.

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