What can replace feverish consumer spending as a motor of economic growth? Health care, some say. This is a mirage. To be sure, health spending will increase. But its expansion will simply crowd out other forms of consumer and government spending, because it will be paid for by steeper taxes or insurance premiums. Both erode purchasing power. Higher exports are a more plausible possibility; they, however, depend on how healthy the rest of the world economy remains without the crutch of exporting more to the United States. Another possibility: a surge of investment in new technologies. But what if the correct answer is “nothing”? Nothing takes the place of the debt-driven consumption boom. Its sequel is an extended period of lackluster growth and job creation. Somber thought. For good or ill, the ebbing shopping spree signals that the U.S. economy has reached a crucial juncture. It will challenge the next president in ways that none of the candidates has probably yet contemplated.The Great Shopping Spree, R.I.P. (28-APR-08) Newsweek
