Jeffrey Snider here:
To maintain the post-recovery muddle required a serious correction in the personal savings rate – from a high of around 6% in mid-2010 all the way down to 3.2% earlier in 2012. Without that decline in the savings rate personal spending and consumption would have likely contracted long before 2012. The savings rate has backed up toward 4%, and it appears retail sales are following that.
We noticed the phenomenon already last November here, calling attention to the role that the Social Security tax reprieve was playing in the equation.
Imagine how bad the savings rate and retail sales would look now without that extra cash sloshing around. As it is we're still robbing Peter to pay Paul from Social Security, if anyone out there remembers anymore who those two guys were.
If anyone in the media bothered to check, regular folks out here are getting crushed in this economy at the same time that they are paying for all the handouts given up and down the ladder.
Unfortunately no one will listen to those of us who say stopping the run-away spending train is job one. Not Bush, and now not even Romney.
YOU PEOPLE ARE IN DENIAL.
