Mohacsy's Safe Portfolio Member Forum

[Elroy Jetson]

This economic slow-down, what I'd call a regression back to a sustainable level, is what should happen as Americans return to spending only a portion of their income, as opposed to the 106% of their income Americans have been collectively spending in recent years.

If we can achieve this regression back to a sustainable level over the next two years, we'll be in good shape. It will take five or six years to grow back to the spending we were recently doing, but six years from now we'll be spending that money with Americans saving part of their income each year, instead of going further into debt each year.

The government can spend less than this missing amount of spending to keep some semblance of stability - which is what is happening so far. The mistake would be to try to make up for all the reduced consumer and business spending with government spending - in that direction lies the Japanese fiasco.

This is going to be a tough period, but it's long overdue and very necessary to a healthy economy.