More consumers as the answer?
Posted here Tuesday, February 03, 2004 at 6:02:40 PM 
More from the Atlantic. The way to solve the economic problem is by creating more middle class consumers... but in reality corporations want to sell to each other, the environment is at risk, and there is a world wide surplus of many products, like cars. Also at stake is the image of life: is consumerism to be the driver of the future in a crowded world?
How to escape this predicament? The United States cannot, of course, undo its debtor position overnight. But there are steps that it can take to keep the current-account deficit from getting worse, and to begin to wean our economy from its unhealthy relationship with Asian exporters. Essentially, we must begin to reverse the pattern of overconsumption by Americans and underconsumption by Asians that now characterizes the U.S.-Asian relationship. The first step, if we want to stop accumulating international debt, is to begin producing more than we consume—and to do that we must increase our national levels of saving and investment.
But that in itself could cause a global economic crisis: if American consumers stop buying, the world economy might sputter and collapse. Thus we must also encourage other societies to consume more, particularly more U.S. goods and services. There are inherent limits to how much the aging societies of Europe and Japan will be able to absorb from American producers, so the fastest route to decreasing the current-account deficit while growing the global economy lies in building a middle class of consumers in the emerging economies of Asia, Eastern Europe, and Latin America. The way to do this is to encourage Europe and Japan to invest their surplus savings in countries such as South Korea, China, Taiwan, Brazil, Malaysia, Turkey, and Mexico. Such an influx of investment would allow those emerging economies to both consume more and invest more, helping to produce what might be called middle-class-oriented development.
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