I see headlines and articles discussing how consumer spending is driving, or of late, possibly slowing, the economy. But if not for people buying non-essential products and services, what else would drive the economy? Everyone needs food, shelter, and clothing. Many need cars, depending on their location. But I take it that spending on necessities is not enough, especially non-consumable or long lasting things like houses and cars.
In: Economics
Canada, for example, has huge natural resource sectors – oil, timber, minerals, etc. If oil prices drop, provinces like Alberta suffer. It’s not nationwide, but it makes a big dent in things like government revenue, employment numbers etc.
Small European nations might have massive banking sectors, or tourism, or cheese-making, or whatever. If that crashes, it could immediately make 100 000 people unemployed.
The problem in America is it’s too big, too rich, and too diverse. Detroit died because the car industry imploded, but that had very little impact on California. Florida will be destroyed by rising sea levels, but Montana will be fine. Some places with a huge military base would be gutted if that base were closed, or farm country if they can’t get workers, or whatever.
The one thing most places have in common across the country is consumer spending. So that’s the huge one that you can point to.
This is why it makes sense to have subregions within a country. Consumer spending is important, but there are 100 regions within America (or more) that have different needs and policy needs to be tailored to them. You could make a MUCH bigger dent in the economy by making local changes that help farmers or enable manufacturers or address infrastructure concerns when you can focus on a small area.
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