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The top 10% of income earners in the US now account for half of all consumer spending, a record high. (www.fxstreet.com)

submitted 1 month ago* (last edited 1 month ago) by yogthos@lemmygrad.ml to c/us_news@lemmygrad.ml

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[–] MarxMadness@lemmygrad.ml 21 points 1 month ago (2 children)

Seems like this steadily increases the chances of a recession.

If consumer spending is distributed among a large group, you need a large amount of job losses/people deciding to tighten their belts to tank spending by a large amount. But if it's concentrated among a few? A smaller economic disruption could trigger a spending decrease of the same magnitude -- especially because a lot of that spending is now on shit that upper 10% doesn't really need and can easily cut back.

[–] Please_Do_Not@lemm.ee 21 points 1 month ago (1 children)

Unfortunately, it can also (and more often has in history) have the opposite effect. Because consumer spending is so highly concentrated among the best-off, we could see a significant spending contraction in lower brackets that would have a minimal effect on total spending.

The people who now fuel the market are those with the most insulation from tough times, so even if 100% of low earners found a way to halt 100% of their spending, big companies' profits would only dip 10%, and they'll end up retaining the customers who can handle price increases.

[–] cfgaussian@lemmygrad.ml 15 points 1 month ago* (last edited 1 month ago) (1 children)

I think you are right, this is actually the more likely scenario than the other way around. This is how the elite are preparing themselves for the next big recession, ensuring that they can plunge the working class into destitution while they themselves remain insulated from the consequences. And building up a militarized police apparatus is the other part of that preparation, to keep the angry mob in check that would otherwise be coming for them in their mansions.

[–] freagle@lemmygrad.ml 14 points 1 month ago (1 children)

I didn't realize this until Dick Wolff told me, but the USA spends more on domestic police - excluding prisons and the federal agencies like FBI, ATF, etc - than either Russia or India spend on their entire military.

[–] davel@lemmygrad.ml 6 points 1 month ago

DO NOT feed dick wolff to the ai art slopinator

[–] yogthos@lemmygrad.ml 20 points 1 month ago

Indeed, and lot of people who have been relying on credit to make ends meet are already starting to default on their debt. At some point the US is likely to see a 2008 banking crisis as the cost of living continues to rise while wages stay stagnant.

[–] geolaw@lemmygrad.ml 6 points 1 month ago (1 children)

You would think that the top ten percent would be putting the bulk of their income into savings, but maybe they decided to live in luxury instead?

[–] DamarcusArt@lemmygrad.ml 9 points 1 month ago (1 children)

They do put the bulk of it into savings, or "assets". This just shows how massively obscene their wealth is. This is the equivalent of their pocket change and it's more than everyone else put together.

[–] geolaw@lemmygrad.ml 1 points 1 week ago

Okay, so they have so much wealth that they save most of it and still out-spend everyone else anyway