Apparently retail sales increased in January 2009.  Forecasters are expecting sales to decline again as we get deeper into 2009.  There is much anxiety expressed about retail sales, because it measures consumer spending. 

Consumer spending, apparently, accounts for nearly 70% of the U.S. economy.

That much gets said in the papers, but what does a 70% consumer spending economy mean?  It seems to imply that we don't make much of anything in the U.S. anymore.  We're not exporting any great deal of items that other people in other countries want to buy. 

So, if we don't make anything anymore where does all the money come from?

Is it possible, in lieu of making anything worth buying, we've started to sell each other?  What I mean by this is to look at mortgage securities.  We had houses that Americans are buying on credit. Whoever holds the credit for those houses should have money coming to them on a monthly basis.  Those monthly payments are you and me paying off the house we one day—ideally—hope to own.  If we don't make anything in the U.S. anymore, is it wise to roll together the hopes you and I have to own a home (or anything else for that matter) one day and then call those hopes all together something worth buying?

In our current market, many of those rolled together hopes are illiquid because nobody wants to buy them anymore.  Yesterday, people were buying hopes and mortgage backed securities were liquid.

Wouldn't it just be better, for everyone involved, to make stuff that other people want to buy?