How has comsuming less good for the economy?
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May 25th, 2009
An article entitled ‘A Return to Thrift’ by Geoff Colvin, emphasizes the importance of being thrifty in today’s economic turmoil. Over extravagant spending, especially in housing resulted to debt and uncertainty in economic growth of the country. Banks, are far more less willing to be open to small savers as pointed in the article. Colvin further contends, a solution, but can still be considered a far less ultimate key to the reduction, is simply to be thrifty with ones money. Being able to change the spending behaviour of people will more likely to rise above from the country’s problem. One way is through Environmentalism. Aside from having a greener outcome, it has an effect of making people to spend less by recycling, reusing and having a better decision when it comes to spending on environmental products. As optimistic as it may sound, the solution proposed has its own flaw. Capitalism is ever present in our world, where people spend to receive self-satisfaction, however this also conflicts the idea of self sacrifice, and being thrifty. In order for the proposed solution to work, it really depends on how we are going to embrace the idea to be thrifty.
Is consuming less, good for the economy or wouldn’t less consumer spending also not be good in rebuilding the economy?
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6 Answers
consumption is very important to the economy and, normally, the more the better.
what was tricky about last the last few years was how leveraged the american consumer was- especially in the Real Estate sector. So too much consumption, when excessively financed by debt, can be counter-productive.
Consumption is mainly about status. The more people who gain status by conspicuous non-consuption, the less people will consume. In my crowd, it’s all about bicycling to work and owning hypbrid cars, and shopping at the farmer’s market or purchasing a share in a CSA, and green roofs and composting, etc, etc. We look down on conspicious consumers, and we admire people who can find a way to use less and be more green. We’re a minority at the moment. If we become a significant portion of the populace, the economy will be about being green, not consuming conspicuously.
Less waste..and a cleaner closet and attic..
I think you might be confusing the balance between consumerism and environment. If the items you are consuming are as free of packaging and non-biodegradable material, you are doing the right thing by buying more, not less. The whole thing about less is better is referring to items that end up in the landfills.
Consume less crap, let the crap businesses flounder so un crap businesses grow stronger and spur more un crap innovation and un crap consumption.
Saving is not spending less. If you put your money into savings it is because you plan to use it in the future on important thing to you. After it is saved in the bank it is promptly lent out to people who have a high need for it for their own projects. You just want to save it because you are uncertain what to do with it right now. They want to spend it because they are certain that they have a good use for it. So the money is spent faster when you save and on things that people see as benefiting them most.
So it is more efficient to spend though saving.
Of course this is based on the assumption that you will get the money back someday. That the bank is honest and will be able to give it to you and has not lent it out because of government mandates to bad credit risks. If you are saving and need interest I think CDs would be better. I don’t trust the value of money to not fall by a great deal right now because so much new money has been printed. I expect the fall in it’s price to be much greater than the interest paid so I save in silver.
I understand that China will soon to be on the gold standard. If you can save in Chinese money it might be a good bet.
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