Consumer spend down and taxes up....

Newminimalists are frugal consumers but they must still pay their taxes.

Loose change will not pay your tax increases.

So much is being claimed about the demise of free market capitalism but the fact is we have not seen that system working for decades. The truth is that we all live in a "mixed economy" [private and public sectors] that is being kept afloat by debt. For decades we have had a two sided coin in our loose money bowls [see photo]. On one side we have consumer spending and on the other we have government spending.

In 2020 the issue with most modern economies is simple to explain. Consumer spending is what most of us assume is the basis of any contemporary economy. But we are about to discover that it is not. We know this because at present consumer spending is imploding and the infrastructure that it relies upon is collapsing [bankruptcies in major retailers are a leading indicator here]. Meanwhile the public sector is expanding beyond what it was designed for with the massive injection of printed, or electronic, money into a struggling consumer economy.

So the modern economy is being pulled apart. Consumer spending is plummeting while public spending is raging. It is being stretched to breaking point. And when it does break there will be gaping holes left in each economy that will be filled by inflation [a tax] or direct taxes on land [rates], goods [sales taxes], and services [VAT], and new imposts yet to be seen. This will prove to be the legacy of 2020 as we create a new version of social contracts between citizens and governments. Meanwhile the fate of the private sector will depend upon innovations in technologies. Post-2020 the global and local private sector activity will likely be structured around Starlink and 5G innovations respectively.

There is surely a lot of pain ahead for consumers as underemployment, high-debt levels, job automation, and a premium on talent conspire to change the nature work post 2020. It is difficult to speculate what the future of work will prove to be but it is clearly not going to be a mere extension of what we came to expect back in 2019.

In sum we are experiencing a huge transformations in life and work due to an implosion in consumer spending and an explosion of government spending.

Richard.

You can contact me via direct messaging or email at minimal-you.com