Economic View: Consumer Spending as an American Virtue

Over the last few weeks, President Obama has traveled the country campaigning on the taxpayers' dime trying to sell parts of his Big Jobs Plan.  In order to sell a chunk of that plan - a massive new government spending spree on domestic infrastructure - Obama last week repeatedly cited China's infrastructure spending as the prime example of how the United States is desperately falling behind and needs to catch up:

What the rest of the world can teach conservatives -- and all Americans -- about socialism, health care, and the path toward more affordable insuranceReutersAvik S. A. Roy

Commerce Secretary John Bryson today concluded his five-day business development mission in Mumbai, the commercial center of India. Today’s visit focused on promoting tourism for Indian citizens who want to visit America, as well as exploring opportunities for U.S. companies to promote their technologies and services in India’s rapidly expanding infrastructure sector to support job creation in both countries. Bryson had the opportunity to participate in the official launch of the Visit USA Committee India (VUSACOM), a public-private partnership whose sole mission is to promote and increase travel and tourism from India to the United States. VUSACOM members include travel agents, tour operators, service providers, and U.S. product representatives. In 2011, the United States had a $2.2 billion surplus in travel and tourism from India, and total spending by Indians traveling to the U.S. was almost $4.6 billion in 2011, up 15 percent from 2010. In addition, the number of Indian travelers to the U.S. reached a record 663,000 in 2011.In addition to meeting with government officials in Mumbai, Bryson hosted a luncheon with companies that help finance infrastructure projects as well as a roundtable with companies that are involved in energy-related infrastructure projects. In both, he talked with U.S. and Indian business leaders about the importance of the U.S.-India commercial relationship and he encouraged development of new business opportunities between the members of the delegation and their Indian counterparts. He also talked about the great progress India has made in opening its markets to U.S. companies, but encouraged continued consultations to resolve issues such as market access barriers and intellectual property protection.

With today's GDP report I have updated my economic outlook and extended the forecast period through 2012. It maybe looks a little better, but still not wonderful.

Price Fishback has a new paper and perhaps this abstract should be screamed from the yttertak: