Consumption To Remain Restrained, Says Kruger

718 Words3 Pages
Due Date: 2-24-13 Economic Analysis paper Consumption Consumption is a word that has different meanings, but all of the meanings have one familiar attribute. The familiarity is to take in, to eat, and to consume. The term consumption in economic terms means the value of goods and services bought by people. This is the leading factor that drives our economy. It is also a part of the simple circular flow model. Consumption is the largest factor in the gross domestic product. Many economists base the economic growth of their countries on consumption. The article in the Wall Street Journal, Consumption to Remain Restrained, Says Kruger, by Sudeep Reddy, gives definition to a few of the economic terms studied in this class. The article clearly defines consumption, consumers, and other key terms, that pertain to the economy. Alan Kruger, chairman of the White House council of economic advisors, stated that consumers lost 16 trillion dollars from the end of 2007 to 2009. This was a staggering one fourth of all the wealth in America. "If you destroy that much…show more content…
Many republicans say that raising the minimum wage of Americans will also cause inflation to rise, sending the country back into a recession. Kruger states that when President Bill Clinton was in office and raised the minimum wage, that it actually boosted consumer spending and the economy. There is evidence that suggests that Kruger could be correct in proposing such an action. President Obama has proposed the minimum wage be raised in an effort to stabilize the economy much like Clinton did. When Clinton raised the minimum wage it stimulated a slumping economy and had increases in the job market. Republicans and Democrats are at either end of the spectrum on how to increase consumer spending and the American economy in this recovery
Open Document