"Consumption is the purpose of economic activity and allows us to meet our material aspirations in the pursuit of happiness."The valid concern about household debt is therefore not that it is fuelling consumption, but that it might detract from future expenditure because, for prudent families, debt service gets in the way of other spending. The elderly and the dead, who realized their property assets, tend not to spend so much."Naturally, there are legitimate concerns about the sustainability of the recovery, but most are not related to consumption...Consumption growth is therefore necessary for the sustainable longer-term growth that people of a puritanical bent so desire. The alternative to the unexpected boost to consumption this year would have been much worse: continued stagnation, higher unemployment, lower incomes and worse public finances."So, as the year's end approaches, we should resist the puritan within all of us. Let us celebrate consumption this Christmas."
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Bill Bonner is founder and owner of Agora Inc., one of America's largest consumer newsletter publishers. Best-selling author and globe-trotting correspondent since 1999 for the Daily Reckoning email, he is chairman of family-wealth advisory Bonner & Partners, and co-author with his son Will of Family Fortunes: How to Build Family Wealth and Hold Onto It for 100 Years (Wiley, 2012).
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