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Black Friday supply drives economy ... not spending money we don't have

money070111_optBY REBECCA SHEEHAN
NEWJERSEYNEWSROOM.COM 

The holiday shopping is without a doubt underway. As we filled our bellies with turkey and all the fixings on Thanksgiving, millions of Americans left those family dinner tables to withstand the long lines at area department stores during the wee hours of the night in order to get the ultimate holiday shopping bargain. Crazy, if you want my opinion. Others digested their dinner and got up in the early morning to take wait in the even longer lines to take part in the madness known as Black Friday. Another crazy shopping adventure if you ask me. But without a doubt, one thing remains certain – Black Friday is a must and is essentially integral to economic growth.

Reports have shown that Black Friday weekend produced $59.1 billion in sales, which is up from last year’s 12.8 percent, according to a survey from the National Retail Federation (NRF). Additionally, an estimated 139.4 million adults visited U.S. stores and websites from Thanksgiving straight through Sunday. Based on the survey conducted for the industry trade group by BIGinsight, this is up 6.4 percent from last year as reported by Fox Business.

Although billions of dollars were accrued by our economy during this shopping phenomenon, others, such as President of Euro Pacific Capital, Peter Schiff, will make a case that buying the goods does not lead to economic growth, but rather the production of those goods does.

“The idea that this is good for the economy. The fact that so many Americans are out there shopping is somehow going to grow to the economy,” stated Schiff in an Economic Collapse News article and in his online video from The Schiff Report. “The fact is that it’s not the buying of stuff that grows the economy. It’s the making of stuff. Buying is the result of production. You can’t consume what hasn’t been produced. What’s a strong economy is an economy that produces things and if you produce a lot the reward is you get to consume what you produce.”

But, according to investment analyst and editor Mark Skousen, the question we really need to be asking ourselves during this time of economic growth is in his Foundation for Economic Education, (FEE), published work titled: “Consumer Spending Drives the Economy?”

“It’s supply - not demand - that drives the economy. Savings, productivity, and technological advances are the keys to economic growth,” Skousen wrote. “This principle, (Say’s Law), was discovered and developed by the brilliant French economist Jean-Baptiste Say in the early nineteenth century.”

Fox Business states that the NRF still expects sales in the months of November and December to rise 4.1 percent this year, below last year's 5.6 percent increase.

 

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