Americans are deeply confused about why the economy is so bad — and their president isn’t telling them. In fact, the White House apparently has decided to join with Republicans and blame it on the long-term budget deficit.
Before I turn to the president, though, let’s be clear: The lousy economy is due to insufficient demand. Consumers — who are 70 percent of the economy — can’t and won’t buy because they’re running out of cash. They can’t borrow against homes that are worth a third less than they were five years ago, and most consumers are bad credit risks anyway because they’re losing their jobs and their wages are dropping. They also have to start saving for the kids’ college or for retirement, which will cut their spending even more.