Economic Critique
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Economic Critique
Consumer Income
Household income or consumer income is the amount of money a household has to spend on goods and services. Median household income declined between 2010 and 2011 by 1.7%. In 2011 median income was 8.1% lower than in 2007, which was the year before the recession (census). Aggregate demand is the number of goods and services in demand at a specific price during a certain time. Aggregate supply is the amount of those goods and services.
When a household has lower or limited income their ability to purchase goods and services decreases. A household is not able to purchase the goods and services that they were accustomed to buying in the past. When there is a decrease in number of goods and services bought, the economy suffers.
There are no fiscal policies connected directly to consumer income. There are policies involving employment, which is the main source of income in the United States. According to CBSNews, the unemployment rate fell slightly from 8.3% to 8.2%. The labor force participation rate fell from 63.9% to 63.8%. There were 120,000 jobs created but that was barely enough to keep up with the population growth. Policy makers in government need to realize that doing too little is bad when the economy is slow and doing too much when the economy speeds up is as bad.