Can the world live with a frugal American consumer?

Posted by: Diane Brady on January 29, 2009

For all the criticism of Americans and their profligate spending in recent years, it’s clear that their appetite kept a lot of people in business. BusinessWeek editor-in-chief Steve Adler moderated a panel at Davos today on the subject of how the world will cope with a new frugality among U.S. consumers.

The impact of the sharp drop in spending has proven devastating to manufacturers. Adler noted that Americans have accounted for nearly a quarter of global consumption in recent years, about three times the level of spending by consumers in China and India combined. Now, the U.S. consumer engine is slowing at a record pace.

The most dire assessment came from Ian Davis, Worldwide Managing Director of McKinsey & Company (U.K.). He noted that “Americans have no option but to be more frugal over the next 10 to 20 years.” Along with being cut off from credit, the population is aging and “older consumers don’t buy as much.” His advice: Look to the East. Big consumer companies in the coming years will be Asia-focused.

But Zhu Min, Group Executive Vice-President of the Bank of China, predicted that it will take many years for Chinese consumers to make up for the gap created by falling U.S. spending. The Chinese currently spend about $1.5 trillion, vs. the $10 trillion normally spent by Americans. Even with 21% annual growth in spending in China, that won’t be enough to make up for what Zhu projects to be “a sharp drop in American consumption for three years.”

The question is how long Americans will stick to their tighter ways. Will frugality become the “new normal” among Americans, as some people fear?

Richard Haythornthwaite, Chairman of Mastercard Worldwide (U.K.) didn’t appear convinced. While the dollar value of sales has dropped sharply, the actual number of transactions has held up surprisingly well. He concluded that “Americans are shopping smarter.”

Ken Rosen, Professor Emeritus at the University of California, Berkeley, insisted that the spirit of frugality will last. “We spent money we didn’t have on goods we didn’t need,” he said. Now, American consumers can’t refinance their homes or get access to credit—and the situation will only get worse as layoffs escalate. “I’m still worried that the housing market has not stabilized,” he added. “The team we had in place over the last eight years dropped the ball … The free-market fundamentalism we had was a mistake.”

The solution? Government spending, according to Yasser El Mallawany, CEO of Egypt’s EFG-Hermes Holding. Ideally, he said, infrastructure spending will help to spur growth. The big issue is whether governments will fall back into a pattern of protectionism. That, he asserted, “could bring the world 40 to 50 years backwards.”

As for the assertion that Americans have, in fact, become frugal: “I don’t see anything under the current definitions of ‘frugal’ that suggests the U.S. is a frugal country,” said McKinsey’s Davis.

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Reader Comments

econguy

January 29, 2009 01:32 PM

Thanks! At least someone is thinking ahead about the the new normal of pinched consumers. Except you left out the part about fewer trips to Europe and a coming period of punitive tax rates. This period of extended low growth will not be limited just by credit or preference. It will also be limited by massive tax bills to pay off the Chicago gang of spenders and a host of unfunded social liabilities. There will be no choice in the matter of middle class demise.

Wadhamite

January 29, 2009 02:58 PM

I teach a philosophy course at the local community college where we have looked at the relative "happiness" of Asian nationalities that are materially disadvantaged. Conclusions are inescapable: money does not buy happiness. To the extent Americans and others grasp this, we should expect realignments in the future. But a surge in frugality will not all be bad (except perhaps in economic terms); quality of life ought to improve, along with security and global fairness. Americans haven't had a war on their turf for a long time that ravaged their material possessions or destroyed their jobs. The scales may eventually swing.

BCR

January 29, 2009 02:59 PM

America has become the most wasteful society on earth. We buy junk we don't need on credit cards we can't afford, use it for a short while, throw it away when it breaks, and go buy the same thing again. Never ending cycle. We need to stop buying houses that are so big we can't afford to heat them, stop buying cars just to have the newest model, and just say no to the stupid "junk" that's out on the market today.

Jim Steitz

January 29, 2009 03:43 PM

Does it get any more insane than this? The world cannot physically sustain today's level of material consumption of fiber, soil, water, metal, and protein, let alone the growth from Asia that most people expect. Mathematics forbids it. These consumerism boosters will learn some very hard lessons in the coming decades, as the liquidation of the Earth's natural resources hits the empty-mark on the gas tank, and life-support systems that make possible the production of our oxygen, food, and water come to an end.

curious

January 29, 2009 04:36 PM

There is a difference between being frugal and spending what you actually have (or actually can spend), right? Which might explain different opinions above. You need to splurge sometimes otherwise you'll be working like a robot, not knowing how to have a bit of fun.

Marlena Burns

January 29, 2009 04:42 PM

I agree with the above quote: "I don’t see anything under the current definitions of ‘frugal’ that suggests the U.S. is a frugal country.” I think this is just a temporary phase and it is too early to declare America a 'frugal' country. I am sure US would bounce back from this recession very soon! Let's hope for the best ;)

purewater7

January 29, 2009 04:48 PM

I think it is about time for not just Americans, but everyone become more frugal. It is sad that this bad economy had to force most of us to tighten the belt! My motto is if I don't NEED it then I don't buy it. If I can't afford it, I leave it! It certainly worked well for our parents and grandparents.

mikemike

January 29, 2009 05:17 PM

I can't deal with this stuff. I'm not frugal at all. I believe in working hard and making lots of money and spending it all on Mai Tai, and other delicious rum based mixed beverages on an island in the Caribbean. You don't get rich by making yourself suffer.

Joseph T.

January 29, 2009 05:21 PM

If Americans could save 11% of disposable income like the Germans, we could fund our own stimulus and greatly reduce the trade deficit. How about no tax on bank interest?

Leslie

January 29, 2009 05:53 PM

McKinsey is probably right that Americans are not frugal, but would have to take issue with Holding and his seemingly negative assertion that going back 40 years would be all negative.

40 years ago, a single mother couldnt get equal life insurance, or credit cards. So everything was cash or do without. Doctors, utilities and basic services allowed payments instead of requiring payment in full or put it on your high interest credit card, financial arrangements. Ironically, one couldnt get credit if they did not owe anything, which encouraged savings for the poorest people.Department stores took lay away payments before getting merchandise, which encouraged budgeting and delayed gratification, especially for young people. The U.S. was also almost 90% self sufficient, and did not depend on other countries for safe food or products, and quality exports of most all items including Levi's, were the envy of the world.
The citizen had control of their bank account, and could even stop a check to a merchant for faulty product, or use a time stamped check to prove a company was not entitled to a late fee, erroneously charged. An employee who made mistakes could be caught and disciplined or money refunded through real problem solving and the desire of the bank or merchant to keep you business. I could go on, but:

To say going back 40 years would be devastating, is to appeal to younger Americans who have no knowledge of an age where technology and regulation, created a market for goods, like computer chips, and discouraged our production or building of existing natural resources and manufacturing at the time.
Law became a man made product and service, with one state producing more lawyers than all of Japan's engineers, private unions lawyered themselves right out of jobs, while public service unions increased and kept the civil lawsuits and rights a viable non productive product.

My contention is that WWII generations and their boomer babies, still remember some basic frugality issues, the good and bad. We could immediately cut cable and satilite, saving $60. amonth and go back to free television, until government created a market and dictated the purchase of a DTV receiver. The current generation, even those on welfare or food stamps, sees satilite and cable as a basic necessity. The precut stew meat or easier than buying the rumpt roast and cutting it yourself. The current issue of parents demanding free school hot lunches, when we didnt have calory or health problems with our kids, when parents packed the basic fried egg sandwich, tuna or peanut butter, with an apple and pudding every day?

Millions of seniors are struggling now to live within fixed incomes, boomers are having to compromise and adjust. But these generations of Americans are the most experienced with previous government promises and bailouts, and thus the most likely to not trust a "temporary" fix, knowing the results inflation and debt incurrs. They are not afraid of self sacrifice and can revert to frugal with difficulty. Millions of grant funded rich adults and generations of government welfare and social services educated young and old, don't know frugal from false pride and self sacrifice. Sadly, many will buy a ipod while on unemployment, before taking a job beneath their educational level, or beneath their supposed dignity. Cry they can't afford health insurance, while forking over $150 a month for mobile phones, internet and satilitte TV.
I hate to generalize, but general statements as to the negativity of protectionism or going back 40 years, is to generalize the negativity of being self sufficient, independent and unregulated.
Its like the argument for specializtion over generalization in corporations and government. You might make more money specializing or compartmentalizing in the short run, but in the down times, can you survive if your specialization or market dries up,the government cuts subsidies, or customers just get back to basic needs and priorites?

We might be in general recession, but most individuals are frugal because of the inflation going on still in the states and localities and yes with propane and heating oil which is a basic necessity more crisis than global warming to seniors and low income middle class.
We will stay frugal as long as the States and Fed, fail to acknowledge that it is the working poor and working middle class that has been the backbone of our rise and sustainability,and who now are expected to go back and be retrained again,to get construction jobs sodding the mall or insulating low income housing projects, or spend more and change degrees from Business and MBA's, to environmental science and genetic or computer engineering. Give me a break.
Going back might be progress, and a little nationalization over global warming and global economy, might teach us a lesson in basic economics, that the teen agers in Congress failed to learn. False pride is athema to work ethic, pride goeth before the fall, and all politics are local. Until Congress gets their salaries cut, their government retirement plans slashed, and their dependemce upon government wages and benefits denied, they will never be able to see or empathize with the teacher, cop or independent business owner, who paid for their own education, worked part time jobs to supplement their income, planned their retirement and adjusted to the last oil crisis, and recession and inflation. Only to find that at 62, this year, their social security was stolen in 85, their retirement is diminished again by the crisis, and now Congress wants them to overcome age, illness, inflation and age discrimination, by working longer and harder, than is expected by the 20 year old youngster who is complaining about his college grants and cost of college, who has ,never paid into social security or even taxes, and says he/she is to good to work at McDonalds or Walmart. Entitlement? Frugality? Who is guilty here? What group of people are likely to learn, change and adjust? Looking at the current bailout package, I bet its those who know what survival of the fitest really means and have been there done that before. Not those of the throw away society and instant gratification generation. Maybe its a numbers game after all and depends how many middle class folks have already given up and decided they are either rich or poor. Independent or dependent. As one ages hope does get tiring.

Strategery

January 29, 2009 06:22 PM

The answer to this question depends on the length and severity of the downturn. If we encounter depression conditions, it will cause a generation (or two) of Americans to be very frugal. If you examine anyone who lived through the great depression, they are frugal to this day. Also, there is a very real possibility of another generation that distrust banks and the government. It is not the job of the American consumer to drive the worlds economy; our trading partners need to develop their own economies and buy American products to fix the trade imbalance.

Leslie Martinez

January 29, 2009 08:18 PM

How about the individual States quit using the Feds like its a well with water from someone elses property, when all the wells are supplied from the same aquifer.
Ultimately all the wells go dry, creating a crisis for everyone un-equally, even though one farmer used 10 times as much making ethanol for cars,and profit and another only used water for food and drink. Of course the less water the one family drank the more he was charged by the city and then the State, to keep the tax base up. Then city, state and feds gave the other property owner tax breaks on his water because he hired people and was a small business owner and made ethanol to save the globe and believed in global warming.
Now the crisis is exacerbated because no one has water to drink, and all the people with jobs dont have ethanol to drive, and no transportation because everyone is dependant upon water to grow the corn and wheat grass and transform it to ethanol. The guys working for the small business owner are out of jobs and don't have water to drink or money for food. But they have savings and get aid from the Feds and the States through unemployment,but don't have water to drink. They dont have to worry about bicycles for work, cuz they don't have jobs.
Now the small guy is thirsty but he has a job working for government sodding the mall downtown,but he's looking for bicycles that arent manufactured anymore, to travel 30 to 50 miles daily, just to keep that government job of insulating low income houses, or planting sod on the mall, just because there are no jobs locally and too much regulation earlier to use the oil and gas in the towns backyard.
Even though he conserved and worked all his life for the basics, used a minimal amount of the basic water resources, he never was able to save the 11% because every extra amount went to some government trough called state, local or federal taxes and of course social security which was used to pay the unemployment and water bills of his neighbors and the poor.
NOw both neighbors and workers are both dependent upon some government and some tax, for either their job or their unemployment benefit.The difference is nobody has water needed to live! The guy with the job won't have it long cuz he cant afford a bicycle and theres not enough time to build a oil refinery for heat and gas for his old car and house heat. The other guy made lots of money or higher wages, so he has savings, his wife earns money from government as a professor at the college and they can afford to buy water from China, if the feds will raise taxes to speed up the ships full of water, creat jobs for the scientists and the poor. Or they can afford to move to the next State over that conserved their aquifer.
If the city and States will put in for more educational money from the Feds,so they can keep from cutting the Governors appointed positions, the bloated educational system, the increased WElfare for aliens,stopping the tax cuts to all those new businesses, and make up for all those tax revenues that water rates and oil and propane used to supply. Why then everybody will be just fine!
But still the economizer of water, who worked all his life is without water to live, and can't afford to buy it from China, let alone afford the new local, state and federal taxes that all come out of the same well as his non working neighbor who gets unemployment, has savings, and bought into the global warming environmental entrupeneur crisis of 2008. THis family is working but can't afford to move to the State next door.
When the State next door saved by cutting welfare, cut pork, deregulated water and oil production and gave basic services to all the people, they will not ask for or be rewarded for their low deficet or ability to provide basic water and oil to their own people.That State is not the squeaky wheel that gets the greese, nor the one that will request the most water from the well. But...
Whats the crisis here? No water to drink for the middle income working man, or failure of city and state to provide the basic necessities through reasoned tax and regulation, without always assuming the big federal well will never go dry? Spending more than past taxes ensure, rather than anticipated income from new business and a few years of inflationary Sudi oil prices?
The Feds refusal to stop enabling with social programs and government work and high income contracts, a system of dependency and thirst based upon politics, scientific theories, and tunnel vision, does nothing to encourage self suffciency to the States or work ethic and conservation to individuals or States.
Maybe the quote should have been Capitalism or a Middle Class, if you can keep it, rather than "a Republic if you can keep it". Because basically States rights wasnt conceived as a right to more tax money from the Parent Government or the communal well. Or for the fed to be the maker of laws that could be enforced on all the States, just so they could keep their existing grants and subsidies and social programs.
The Fed was never intended as the bailer and distributor of tax money to corporations or to spend thrift States, like California and others. Rather charity begins at home and the States were home. Able to decide for themselves what laws they wanted, what charity they could afford, and with enough independence of thought and thrift, to stay within their budgets and the public trust. Oh how far we have come.

allenwrench

January 30, 2009 08:40 AM

We can see we have created a time bomb. Even the highest level brainiac economists can't fix what ails us. Our whole system is based on an unsustainable model that will eventually collapse no matter how much money that is printed up by the Fed. (...they don't even need to print money nowadays, all that needs to be done to create billions is to magnetize a silicon chip!)

Now maybe if our energy supply was stable and affordable and global warming was not an issue, things would be different and we could keep on consuming and expanding as infinitum

Sad thing is...IT'S NOT THAT SIMPLE TO DO A 180...Without compulsive spending and conspicuous consumption funded by unaffordable debt, we would fail as a country.

You ever hear the saying...'I got the tiger by the tail and can't let go?' That is how it has developed in the US of A.

Lets say everyone becomes voluntary simplicity and frugal squirrel devotees. We recycle, reuse, repair and just say no to buying more crap. If we stop buying all the stuff that America imports from China - who keeps the billion plus people in China from starving, so they do not go back to old ways of trying to take over the world?

China and Russia tried to support its people though a sustainable, self sufficient manner when they ere totally RED. Now that they are PINK, they are much more successful at support, So the world exchanged the dread of communist domination for that of the problem of more capitalism and consumption. But as Taoists tell us...fleas come with the dog. America now wishes China and India had stayed backwards. But as long as the crude holds out, they can't go backwards once they got a taste of the American dream.

Maybe if China was a a balanced self sufficient economy with less mouths to feed and things would not be so bad. Same as the US...self sufficient. But everyone is globally connected nowadays.

And on a more local level, if the consumer stops consuming even US goods, the US companies go bust, everyone loses their jobs and his or her retirement funds will collapse.

What about growing a garden...nothing wrong with that? Lets say everyone starts growing 'victory gardens' in the backyard as food has become unaffordable. So some of the few farmers left in the US go bust cause their food just rots on the shelves unsold. Now there is less food being produced and at even a higher cost to those that can afford it the least.

What about more taxes? Tax the little guy so DC can pay for their compulsive spending disease. More taxes = less for us to compulsively spend 'trying' to buy happiness = lower earnings for the greedy corporations = raise hell with the DOW = less cap gains tax income for the gov to squander = everyone's retirement funds sink lower and lower = even less compulsive spending since everyone is poorer..."A debt-based society cannot prosper and is doomed to fail..." ~ Ron Paul

Back in the day, (prairie and turn of the century) citizens were more of a self sufficient nature. Most of us have lost that skill of self sufficiency and we have shifted gears to be dependent on gov and a few other such as farmers or oil producers or China to take care of the whole pop of the US. The problem is, it is very hard to go back without causing a lot of pain. (Actually a lot of deaths)

Hell, the impotent people of modern day and age can't even make pancakes or peanut butter sandwiches and have to buy them ready made in the store...it's really scary.

Tom

January 30, 2009 02:26 PM

Thing won't turn good if you goes too far. I would say buy less Foreign and buy more American because buying more foreign creating more deficit but more American will result some more jobs possible.

Lisette

January 30, 2009 11:24 PM

I don't think America has gone frugal yet. I think there are more people thinking about it though. Frugality is now cool. It would be really interesting to do a survey of Americans and actually see if they are now doing things that are frugal. Living frugally isn't just about doing one or two things, it's about changing the way you think about money. Doing many little things that will add up. Living within your means! Unfortunately, I think we have a long way to go before things start getting better.

Diane

January 31, 2009 11:46 AM

I think the shift in thinking will be a generational one: If this crisis is prolonged, you could find young people developing a permanent "frugal" mindset. For Boomers, who have been used to consuming their whole lives, spending will pick up once the economy picks up. They aren't going to change their ways.

Ogg

February 2, 2009 11:29 AM

Awwww, too baaaad. the Americans aren't going to buy anymore. Guess what - the rest of the world can go fuck themselves, including the liberal democrats and life sucking welfare lazy fart asses. The working people of america are going to cut the balls off the rest of the world for screwing us for the last 20 years. see you in hell mother fuckers.

James

February 3, 2009 07:39 PM

allenwrench,

I guess I see things a little differently. I (almost) never met a boomer who wasn't ready to put a facelift or SUV on credit. The Greatest Generation - yes, but boomers, DEFINATELY NOT!! I see them as FAR less likely to change than gen's that came behind them. They got us into this mess and it's only going to get worse as they start demanding that the rest of us pay for their health care and social security.

Frank

February 6, 2009 06:22 PM

Mostly, very good comments.

A frugal person can have a high quality of life if not an excessively high standard of
living. It is not clear to me that all of the borrowing and excessive spending over recent years for fancy cars and MacMansions has improved the quality of life. Actually, frugal folks with savings may be happier than the big spenders.

Netteligent

February 10, 2009 04:58 AM

We outsource our jobs oversea. Americans are biggest consumers in the world. Then we wake up to face reality: No Job. No Money. No Honey. No Bail Out. No Problem.

wowlfie

February 17, 2009 12:30 PM

Since it's inception, a major parameter in the US income tax code has allowed homeowners to deduct interest paid on their primary mortgage. In addition, the US government, through agencies such as the Federal National Mortgage Association, has tendered policies that effectively favored home ownership over renting. Thus the US government has adopted a policy since at least 1913 of subsidizing home ownership. It's been concluded by some economists that one-quarter of the growth in the ratio of homeowners to renters is directly attributable to these favorable tax treatments of mortgages.

And that's not such a bad thing because it has allowed over the last 60 years a greater percentage of Americans to own their home. And this in turn promoted 'safer havens' of nested communities (suburbia) where homeowners took pride in maintaining and keeping their communities safe for their children.

But when democrats (under President Bill Clinton) made it their primary goal of an administration to promote the home ownership ratio for the then current 65% in 1995 to about 68% by 2000, and then when the republicans (under President George Bush) encouraged more home ownership for minorities their tandem (bipartisan) goals lowered the barriers to home ownership and invited the current situation of mortgage fraud, credit swaps, McMansions, 'keep up with the jones's egos', 'must jump on the bandwagon before it's too late', etc., etc.

Which as we know has resulted in a vastly overheated housing bubble that finally burst in 2006.

And now the resulting deflationary spiral--because so much of everything we consume is tied to a home--is wrecking the American dream and has the potential to destroy everything our parents built since the last Great Depression.

There are numerous proponents on how to fix this. And most quibble and bicker over each one as being unfair, counter productive, economically unsound, or even evil.

But the bottom line is something dramatic must be done to right the ship or as Obama has stated we will suffer an 'irreversible recession' (a discrete term for GDII). That's not acceptable for our children and grand children. We need to do better.

But the tools are available to effectively fix this situation were in. Granted, what's currently being proposed--lowering interest rates, buying up bad loans--those are part of the fix. But alone they are not enough to cure the downward spiral in home prices because even finacially sound buyers of homes that were purchased prior to 2002 and earlier are becoming 'upside down' and more prone to owners simply walking away (foreclosure) thereby exacerbating the problem in an ever expanding collapse.

People can be encouraged with economic incentives to stay in their homes. But offering a credit to new home buyers is insufficient because it's a one time thing and it only applies to those who can actually qualify and afford a home and are willing to take the risk of buying something in a increasingly downward spiraling market (the number is shrinking by the day). So this won't work alone. It will slow it down but it won't stop the collapse which is being fed by FEAR of deflation (in home values, car values, etc).

But the tried and true old home interest deduction is STILL a valuable tool. By itself it can actually overheat a market and has to be used carefully with careful legislation. But it should be used at this time by expanding the interest deduction by tripling or doubling the deduction as necessary to get the market back to stability. It can do this by making homes more affordable for anyone paying a mortgage and it's value cannot be overstated. It can make it unwise to NOT own a home again (right now it's not wise to own a home it's too much of a liability). At least for the short term the deduction needs to be increased until things stabilize. This deduction doesn't allow someone to take a credit and just walk away from the house--which many will do when accepting a credit. It forces them to stay year after year to get the deduction and thereby promotes stability which a credit does NOT. A credit is just another black hole like the banks. It will simply disappear. It also helps those most in need whereby those in the bottom rung who bought homes with 50% ratios of income to home payments would be deducting a greater percentage of their income.

Some say this is unfair because those people should have know better than to buy a home they could not afford. But this is quibbling because if we don't do this we ALL LOOSE--prices will continue to drop until homes are all auctioned off--to the highest bidders overseas.

Do we want that for our children? No.

So to put some temporary teeth into the subsidization and reduce the fear/liability of owning a home in this market--then we need to do implement this immediately effective for the 2008 tax year.

But this can't be allowed to stay the status quo. It eventually will have to be rolled back to current levels. But it can be an effective tool to regulate the market by keeping the market from over heating or crashing. The government cannot regulate long term rates but it can control the subsidization of homes by making use of the deduction (changing it's ratio periodically).

This was an effective tool that promoted home ownership for almost anyone who ever bought a home for the last 60 years. Almost all our parents depended on this tool when they paid their mortgages on time for 30 years until they owned their homes. It can still be an effective tool today if it's not ignored and used wisely.

But if we quibble over this and say increasing the deduction allowance will just over heat things (which is ludicrous the market is NOT in danger of being over heated for years to come) or proclaim it's not fair (because a person owns their home outright and has not mortgage and won't benefit) then the American dream our parents had since GDI are about to go down the drain. A credit will not keep prices from falling. It's not enough. Refinancing a mortgage only helps a limited amount. It's not enough. The government has to bundle something more and that's a temporary increase in the interest deduction until things stabilize with a credit for those who own their homes to keep it fair.

In essence our government must do FOUR things in concert:

--it must promote refinacing at lower rates for everyone--not just those in trouble or over their heads.
--It should reduce principals owed as necessary (for foreclosures, short sells).
--it must grant a credit to those already owning their home (a reward for fiscal responsibility such as a temporary moratorium on real estate taxes) as a matter of fairness,
--increase the interest deduction to promote a larger desparity in renting versus owning a home--temporarily. This can be phased in and out and starts with 2008 income taxes--not 2009.

If all four of the above are implemented there is a good chance we can halt the deflationary spiral as people's faith in the system will eventually be restored.

Anything less the the 4 things above will not work and will result in decades of negative growth and eventually total collapse.

If we don't do the above four in a concerted effort to stabilize the home market then truly our nation will suffer Obama's 'irreversible recession' and our kids and grandkids are going to be asking us why didnt' we do this?

Good luck everyone.


Curtis Hammond

February 19, 2009 03:12 PM

What they should do is what they are doing and then some. Something equitable like make the interest on EMI not offset by the starndard deduction for example. This is fair to all tax paying homeowners and is tax relief. That could be done now! To put more than a measley 400.00 in our pockets. Also, they could reinstitute the credit card interest deduction that they used to have. This along with the new Credit Card Bill of Rights could promote spending while granting relief to people who are strapped in this economy. Again, it is an equitable solution for all Americans not just the slackers or the unfortunate.

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How can you manage smarter? BusinessWeek writers Nanette Byrnes, Patricia O’Connell, Emily Thornton, Matthew Boyle, Michelle Conlin and Diane Brady synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

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