Outside the Box

The Consumer-Dependent Economy

John Mauldin

August 15, 2005

This week's letter comes to us from Dr. A. Gary Shilling, president of A. Gary Shilling & Co., Inc. Gary is a long time friend and one of my favorite economic analysts.

Gary takes a look at what he has termed the consumer-dependent economy. The consumer has increasingly become a larger factor in driving our economy with the help of debt and loose monetary policy. Savings, GDP, housing, debt, and bankruptcy trends are pieced together to create a bleak picture of the baby boom retirement years. You will find this very interesting food for thought in this week's Outside the Box.

John Mauldin, Editor
Outside the Box

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The Consumer-Dependent Economy

By Dr. A. Gary Shilling

The dependence of the U.S. economy on consumer spending is nothing new. At nearly 71% of GDP, consumer outlays are not only up significantly from earlier years, but also much higher than in most other major countries (Charts 1 and 2).


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