Science Blog - US economy slows as global consumer debt rises
(Science Blog - c/o ASA - Monday, August 16, 2004 @ 8:58 AM PDT by bjs)
The U.S. Presidential candidates George Bush and John Kerry promise very different economic policies. But research sociologist and consumer debt expert Robert Manning argues that the expansion of the global consumer economy will necessarily lead to the diminished economic power of the United States, including slower economic growth due to higher interest rates and excessive public and private debt burdens. Manning, a professor at Rochester Institute of Technology, finds that if the U.S. model of credit is adapted globally, it can be expected that household savings rates will plummet while credit card market penetration will continue to soar and average consumer debt will continue to rise. ...
[Manning] shows how the structural tendencies of the Neoliberal trade regime produce underconsumption trends that lead to increasing consumption in the developed countries while reducing wages and effective demand for exports in developing countries. His research has found that the United States cannot maintain its long-term share of global consumption, which has been falling since 2001, due to a low savings rate, modest job growth since the end of the recession, massive public-sector indebtedness, slumping wages, and falling corporate taxes.