Onwards and downwards

The problems caused by Keynesian theory is not that you end up with a sudden downturn, but that you squeeze the life out of the economy by a form of slow asphyxiation. If you have a job and a house, and you continue to work and live where you lived before, nothing much changes around you, other than a rise in prices and a slowdown in income after tax. You are affected but not a lot. Those in transitions, either entering the economy to work, looking for better jobs at higher pay or trying to buy a house, all these are at the pointy end. They notice, since the ability to rise up the income scale is obstructed by some invisible barrier. Things just don’t work out. Which brings me to this story: Americans Are Delaying Major Life Events Because of Money Worries. Life is getting harder so corners are being cut.

ABOUT half of American adults have postponed a major life decision in the past year for financial reasons, mainly because they lack sufficient savings or are worried about the economy, or both, a new survey finds.

The survey, conducted for the American Institute of Certified Public Accountants, found that the proportion of people delaying big decisions like buying a home or getting married had risen to 51 percent, from 31 percent in a similar survey in 2007, before the start of the financial downturn.

The change was striking, and the percentages more than doubled in some areas. Nearly a quarter said they had delayed higher education, up from 11 percent in 2007, and 18 percent said they had put off retiring, compared with 9 percent in the earlier survey. Twenty-two percent said they delayed buying a home in 2015, compared with 14 percent in 2007.

That’s the way it goes. And these are the people who might most at the front in encouraging governments to increase their spending to stimulate demand. So onwards and downwards, and no one has a clue why.

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