70% of the American economy is consumer driven. With Government shutting it down (e.g., Ben Franklin’s saying again!), we can see how fast consumers shut their wallets (even those that still have jobs).
The paper relies on data from a nonprofit “fintech” company that helps people save, and the researchers had access to (anonymized) data on the transactions in these folks’ checking, savings, and credit-card accounts. There was a period last month when they stocked up on certain items and spending went up, but after that spending plummeted, especially on air travel and restaurants.
And this describes the above graphic:
Here’s how different areas of spending changed as everyone locked down for real. Note that what this chart calls the “percentage” change is actually the fraction change, so “-.2” means a decline of 20 percent — and that the spending decline probably had not bottomed out in this period, which ended more than a week ago.
And then the real important one:
Credit card spending went off a cliff. While we do have “In God We Trust” coinage and dollar denominated bills, much of consumer spending is still cash / “cash like” (e.g., debit cards):
Other recent studies confirm the usage of cash is still strong. In The 2016 Diary of Consumer Payment Choice, a report by the Federal Reserve Bank of BostonTM shows consumers paid mostly with cash (31% of payments), followed by debit cards (27%), and credit cards (18%).
The upswing was people changing their buying habits as we all know – groceries and cleaning products. Throw in some heft to the “we’d better get that <thing> now especially if we get locked down”. And as we know, the nation is pretty much locked down. GOVERNMENT, not consumers, made the decision of what we’d be “allowed” to buy by labeling things “essential” versus “non-essential” under the guise of “safety during this pandemic crisis”. Like it or not, this is now a “top down planned economy”.
And people can’t buy what THEY believe they need, and contra Bernie Sanders and his 23 kinds of deodorant when people are starving”
The epitome of the Progressive “tell” ->”You don’t NEED that”. Any time someone (other than your parents) tell you that in “that kind” of voice, the immediate response should be “Up Yours!”. And I’m really getting to that point of telling our representatives that.
That’s not the point of being a Free People.
(H/T: The Corner)
