But Mr. Obama really believes the stars will fall from the sky if spending declines.
When the velocity of money decreases (spending declines), profits are squeezed, and since companies rely heavily on profits, stock prices suffer.
What happens when consumer spending declines in a low inflation environment?
While there is still some debate, experts increasingly agree that most spending declines through retirement, as people transition from the "go-go" to the "slow-go" to the "no-go" years.
The research, based on surveys tracking the actual spending of the same 5, 000 older households from 2001 through 2007, shows that median household spending declines steadily and dramatically as folks age.
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We forecast the downward trend in capital expenditure as measured against sales volumes to continue over our forecast period as spending on expansion declines.
He suggests he will offset short-run revenue losses with spending cuts while raising defense spending, but again declines to be specific.
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But increased health costs are more than offset by declines in spending on entertainment and transportation costs, as aging seniors go out less and perhaps give up their cars.
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It would seem corporate America is well-positioned to offset the likely declines in federal spending.
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On the still worsening side were the further declines in construction spending, and in the Chicago Purchasing Managers Index.
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But justifying tax cuts on the basis of plainly unrealistic declines in that spending is at best a delusion and at worst a lie.
The prospect of big declines in military spending has to raise doubts about whether all of the players currently operating in the military electronics space can survive over the long run.
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But beyond that, here are the top sources of anxiety: declines in consumer spending (42%), regulatory burdens (38%), the cost of health insurance benefits (33%), the growing national debt (27%), lack of available capital (21%) and federal taxes (26%).
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For many, maintaining current spending in the face of sharp declines is a huge hurdle.
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Investment intentions for the year ahead were mixed, with increases in spending expected in product and process innovation but declines forecast in training and retraining and investment in buildings.
Bank of America "periodically reviews accounts based on risk" but declines to comment on how substantial balance payments affect spending limits, according to a spokesperson.
The big relief, in Mr Mishkin's view, is that falling house prices translate only slowly into lower spending, so central bankers can soften even sharp house-price declines provided that they cut interest rates early.
It also declines to commission standard research about its readers' jobs and spending power.
Away from the depressing housing industry, the reports have been of unexpected big declines in durable goods orders, in consumer confidence, construction spending, as well as slowing manufacturing growth as measured by the Chicago area PMI Index, and the national ISM Manufacturing Index.
It remains to be seen if the data heralds a rebound in consumer spending, but Wall Street drew confidence from the figure and reversed its early declines shortly into the session.
Consumer spending remains sluggish due to continued concerns over the outlook for job growth, recent declines in the stock market, the sovereign debt problems of European countries and the Gulf oil spill.
Homeowner deleveraging through cash-ins reduces the vulnerability to further house price declines, but they also reduce the funds available for other investments and current spending.
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Consumer spending may still not be high, but these industries have nonetheless experienced real growth after deep declines or at least stagnation for three years.
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