Are we making the economy worse?

[No Screen Name]

A man on a local radio talk show says he thinks that we the consumers, aided by the media, are making the economy worse. He said that the media does plenty of shows/articles about how bad the economy is, and we cut back. The only problem, according to him, is that many people who cut back are not struggling financially. He says that plenty of middle-class and wealthy people are cutting back, when they really don't have to. This in turn makes the economy weaker, and forces businesses to lay off workers.

He admitted that the gas prices are a strain, but says that well-off people should be able to absorb the higher cost.

What say you?

[Highly Favored]

I haven't really thought about it this way.

<<<===Going to give it some thought.

[Cambist]

We may be making it worse...in theory.

We have been hyper-consumers and many industries growth depend on that trend staying constant. Because we consume so much, any pull back in spending will cause a slowdown in the balance sheets of Wall Street.

Since we have been a credit dependent, spend happy, non-saving society, the current economic situation has caused people to rethink their spending habits, reexamine their household budgets and re prioritize where their money goes.

People are choosing to service or attack debt more aggresively as opposed to making new purchases. They are also choosing to save money in anticipation of job losses.

So, in my mind, it's more like a market correction.

We need to save. We need to use cash. We need to start conserving. We need to start eating at home.

Our health, the health of our planet, the future of alternative energy, etc....IMHO will benefit from such a correction even if in the short term it hurts a little bit.

[Highly Favored]

"We need to save. We need to use cash. We need to start conserving. We need to start eating at home.

Our health, the health of our planet, the future of alternative energy, etc....IMHO will benefit from such a correction even if in the short term it hurts a little bit. " (Camel)

I agree with this much wholeheartedly.

My family and I haven't HAD to cut back YET due to the economy, but it does seem to us like the right thing to do for reasons that are not entirely financial. We need to be more disciplined in our decisions.

[Champs Elysees]

What Cam said. The market is correcting itself. It has always been the middle class and the wealthy people who set economic trends anyway.

As long as you use good common financial sense, you'll be OK.

[T-Rex91]

Jul 7, 2008 11:17:13 GMT -5 Cambist said:

We may be making it worse...in theory.

We have been hyper-consumers and many industries growth depend on that trend staying constant. Because we consume so much, any pull back in spending will cause a slowdown in the balance sheets of Wall Street.

Since we have been a credit dependent, spend happy, non-saving society, the current economic situation has caused people to rethink their spending habits, reexamine their household budgets and re prioritize where their money goes.

People are choosing to service or attack debt more aggresively as opposed to making new purchases. They are also choosing to save money in anticipation of job losses.

So, in my mind, it's more like a market correction.

We need to save. We need to use cash. We need to start conserving. We need to start eating at home.

Our health, the health of our planet, the future of alternative energy, etc....IMHO will benefit from such a correction even if in the short term it hurts a little bit.

YEAH, WHAT CAM SAID!

It always kills me at Christmas when the media reports that spending is down and this is bad. I always think maybe people aren't charging as much and using cash so they don't have the blues in January. That's GOOD.

[DamieQue™]

Yet one more cosign for Cam. This past administration has been a One-Trick-Pony when it comes to spurring economic growth. Their answer for everything - cut taxes. No one says anything about how you pay for the services that people still demand (even those who claim they don't want to pay for them).

The market was already correcting itself towards the end of Bill's administration (from the Tech bubble) - but rather than balance accordingly and be the fiscal conservatives they claimed they were, these idiots cut taxes, grew the government, increased spending, waged 2 wars, sent oil prices sky rocketing, and borrowed heavily from China to fund war all the while weakening the dollar tremendously. What idiot thinks in light of all this we should be spending MORE?

We've all been watching this impending train wreck George Bush's 8 year keg party was bound to become... reckless frat boy spending doesn't work on a national or individual level. But if your boy (the commentator that Z was talking about) is so confident that we SHOULD be spending - let him lead by example.

Let him make multiple purchases on credit with interests rates where they are right now... I'm thinking he should get a boat, some jet skis, and maybe a car and a couple of Flat Screens...

Let's see him go in debt first while he's telling all the rest of us that WE should go back into debt spending

[CrimsonENDvy]

I never understood how the economic stimulus plan was supposed to help the economy...my thought process was this:

You give people who are already in debt money to, in turn, give to businesses and generate this "boost". But what happens once the money is gone? Most people got $300-$600 ($1200 for the couples) and at this bank, a lot of that money went toward overdrafts. (It's amazing how many people are completely irresponsible with their money.) Anyway, would that lead to even more of a depression? And maybe that's what we're seeing with the 35% drop in the stock markets.

What I'm asking is how exactly did the economic stimulus help in the long run? A temporary fix is what it looked like.

So yes, I do think we're making the economy worse because a lot of people don't know how to think long term, unfortunately.