US Economy: shop till you drop?

[question everything]

Back in the summer of 2001 we got checks for $300 (singles) and $600 (family) to "go shopping." Thankfully, most tax payers used it to pay down debt.

It would be nice if our 2008 candidate will address the economic situation, where more than 2/3 is "service oriented": going shopping, whether one needs it or not just to stimulate the economy. Remember papa Bush shopping for a pair of socks?

I was reminded of this lopsided economy, again, when I read TIME magazine story about the housing market:

Still, the slowdown seems certain to take a toll on the economy. Housing activity accounted for a full percentage point of last year's 3.5% GDP growth. Psychologically, rising home prices have made homeowners feel wealthier--just as stock prices did in the dotcom boom--boosting consumer confidence and spending on everything from cars to restaurant meals. Those rising prices, along with low borrowing costs, led homeowners to cash out a record $450 billion in home equity in 2005--money pumped into the economy. Rising interest rates have clogged that artery. And each month millions of homeowners have to write bigger checks to lenders as mortgages with adjustable rates move higher, another clamp on spending.

http://www.time.com/time/magazine/article/0,9171,122335...

(All this, without the rises in gas prices)