Saturday, October 30, 2010

Late Night/Early Morning Ponderings

Job interview question for gubernatorial candidates in the 46 states with a budget deficit:

"The United States Post Office is losing money, i.e. has a budget deficit. It has various constituents--individuals, businesses, employees, unions, etc.--with high expectations for the USPS service and employment. It also has a governing body that has restricted the options available to balance the budget or get in the black, such as it rejected a proposal to raise prices or reduce service. If you were the Postmaster General, what would you do?"


Businesses and individuals are sitting on a lot of cash. Are they itching to spend some of it? Or have we hit a new era of frugality as some claim, like Chris Farrell? Consumer spending grew by 2.6 percent last quarter, the highest quarterly increase since 2006. Business spending on computers, software and other high-tech goods rose 12 percent, while inventory increased in anticipation of 4th quarter sales.

It seems that despite a lot of the doom-and-gloom opinions being expressed, business leaders and all of us people are quietly expressing our confidence that it's okay to spend and invest. We may not know what the future's going to hold, but it must be okay to let a little cash leave our pockets. Besides, the banks are giving us anything for the savings, given that most savings rates are 0.09% in the banks, and 0.21% in thrift institutions. Savings are going backwards in terms of inflation. It doesn't pay to be frugal.

No comments:

Post a Comment