by Bradley Thomas
On the eve of the Great Recession, former President George W. Bush in a 2007 speech urged people to “go shopping more” in order to keep “our economy growing.”
Indeed, the business press scarcely completes a report on the US economy without informing us that “consumer spending makes up 70 percent of the economy.”
If the politicians and business media are to be believed, consumption is king. Consumer spending drives the economy.
But does it?
The laser-like focus on consumer spending as the driver of economic health is largely the result of the government’s premiere measure of the economy: the Gross Domestic Product (GDP).