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Would it be possible to shift the American economy away from consumer to investment spending? Would...

Would it be possible to shift the American economy away from consumer to investment spending? Would such a shift be desirable?

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Answer #1

In my view, that is not possible because US is a consumption based economy and US economy gets 70% from consumer spending. We can see some ups and downs in the consumption but that does not mean that the economy to shift away from the biggest consumer spending as consumer spending is more sustainable and more long term in nature requiring less captial use. On the other side, that is also true investment spending needs to raise as the economy has to go higher to combat low growth but consumer spending will be biggest.

As i said consumer spending being less capital intensive is more sustainable, so shift will not be desirable.

the above is answer.....

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