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From: "dick thompson" <rhomp2002@earthlink.net>
To: "James Anastos" <big2wheelrxx@gmail.com>, "MERLE MCKINZIE" <merlemckinzie@msn.com>, claguerra245@aol.com, calrose123@aol.com, "Michael Kerwin" <east90thst@yahoo.com>, rn326@aol.com, "TheAnchoress" <theanchoress@gmail.com>, "gocinatlanta" <gocinatlanta@bellsouth.net>, "Jim Miller" <jimxc1@gmail.com>, jim@parkwayreststop.com, "jane hoffman" <jarlene4058@embarqmail.com>, "John and Beth" <johnbethd@yahoo.com>, beckymason@cableone.net, "Boudicca Voice" <boudicah@hotmail.com>, "Tammi's World" <tammisworld@gmail.com>, biz@bizzyblog.com, generalremo@cox.net, pammillerhoward@woh.rr.com, annalthouse@gmail.com, politicalforum@googlegroups.com
Sent: Monday, August 2, 2010 11:16:43 AM
Subject: Someone give the Globe a clue bat - why are the rich spending less
Rich spend less, squeezing economy
WASHINGTON — Wealthy Americans aren't spending so freely anymore. And the rest of us are feeling the squeeze.
The question is whether the rich will cut back so much as to tip the economy back into recession — or if they will spend at least enough to sustain the recovery.
The answer may not be clear for months. But their cutbacks help explain why the rebound could be stalling. The economy grew at just a 2.4 percent rate in the April-June quarter, the government said Friday, much slower than the 3.7 percent rate for the first quarter.
Economists say overall consumer spending has slowed mainly because the richest 5 percent of Americans — those earning at least $207,000 — are buying less.
They account for about 14 percent of total spending. These shoppers have retrenched as their investment values have sunk and home values have languished.
In addition, the most sweeping tax cuts in a generation are due to expire in January, and lawmakers are divided over whether the government can afford to make any of them permanent as the federal budget deficit continues to balloon.
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