Since we are all Keynesian economists until we realize that “Keynesian economics” doesn’t work, the problem with the economy is the lack of consumer demand. So let’s do the math on consumer demand. The 47% dependent on the government for their income are by definition living from paycheck to paycheck and have a very limited chance of expanding their spending. The remaining 53% are in a different pickle. Most of those businesses have not seen their sales grow. As a result their employees have not seen their wages grow. In this group are some consumers saddled with too much debt. Since they seeing the increased costs of living, their budget for the upcoming year is to spend less and try to work their way down to a more manageable debt load. I don’t put a lot of hope that they will increase their spending.  They could opt to default on their loans but this will not allow them to increase their spending. There is a part of 53% that had their houses foreclosed on or they defaulted on their consumer debt. If the financial system still has any common sense then these people credit score is bad enough to keep them from spending more than their income for many years to come. From 1980 to today this economy has lived off of convincing consumers to increase their debt. Now there is a much smaller group of consumers who can afford to spend and increase their debt then there was in 1980.

So now we get to people like me who can afford to spend or increase their debt but choose not to. Like most people who feel blessed to have a job and to be debt free, I do not feel wealthy. I still have financial problems. It is highly likely that my income will not go up in 2013 and  I already know that my health care, taxes, and utilities are all going up in 2013. I feel a quiet desperation with my future. My time is running out to save money for retirement. It is critical that I increase my retirement saving rate but my health insurance costs are are accelerating even though we are a healthy family. It is frustrating that in this current health care system a significant portion of my health care cost increase is going to pay my “fair share” to help the uninsured pay for their insurance. Unfortunately this diverts funds I was planning to use for my retirement.  If the system is not working for those with a job, no debt, and good health, the system is not working for anybody. So I am going to focus on doing the simple things to take care of my family. I will cut back on smartphone and cable TV costs. A new car or a house is out of the question. If we are lucky we will not buy any new appliances either. Going without health insurance is an option. Although John Maynard Keynes is cursing me from his grave to spend more for the good of the economy, the economy will have to fix itself without me. Good luck to those Keynesian economists trying to stimulate consumer demand!