Are we all bad for the economy?

[TBH]

Longterm, we would have a shift of wealth, the rich and poor would slowly shift to the center.

I'm not sure I totally agree that that's what would happen, but if you're right, it sure sounds like a good thing to me.

[snafu]

Will the USA's economy mirror what happened in Japan? The Japanese are known world-wide as serious savers. In1998 Japanese Banks failed because of their relationship with government. They were bailed out by government [taxpayers] but house value plummeted by 70%, stock market crated, husband's job restructured, kids graduated from university but no good jobs available and there is no change in sight

[lemarquis]

I agree with kork

[nasser]

bad for the economy

hi,
Not everyone is bad for the economy. The people that are stealing money are causing the economy to fall apart. If you are not a part of it then you are not bad for the economy.

[Scanner]

I agree with Nasser.

Debt and savings are the same coin but flip sides. Banks don't stay in business if they don't have both savers and borrowers. This forum tends to villify the borowers. . .but as we are witnessing. . .they are important to the economy and banking.

The problem with the economy and more our country is that wealth is starting to be concentrated into a relatively few people's hands and the middle class is eroding.

With the middle class eroding, a country loses three things:

1. A repository of values (the middle class provides a country's moral values)
2. A repository of economic activity (the middle class drives economic activity, despite what Conservatives like to say)
3. A repository of National Defense (the rich and poor don't fight wars, the middle class tend to)

Correcting income disparity should be a top goal of economists.

[EEinNJ]

I'm not an economist, but I play one on the Internet. The US economy has been based on consumption financed by debt. GDP has been falsely inflated as a result. When debt leaves the system by paying it off, reduced spending, and bankruptcies, the economy contracts. So, if Americans were to save, pay cash, and stay out of debt, the economy would normalize to a sustainable, tangible level. The losers would be the corporations that make money on consumer debt- big banks, mortgage lenders, credit card companies, auto manufacturers. In other words, the very businesses that the government is propping up to try to prevent this correction from occurring.

[LivingAlmostLarge]

I am spending! I went to a playoff hockey game and am going to a baseball game. Roommate is going on vacation for 2 weeks too!

[Shane Watson]

Everyone has to spend but it is our fear of being broke that has slowed us down. I know that spending increases the value of the money. So all I care is that, it is economy is improving, or it will take some time.

[destiny10]

where will the cash to pay with come from? i think we need credits to survive and work hard.

[Fishindude77]

I think we frugal folks help stabilize the economy, because we can continue our steady moderate spending in good times and in bad.

This !

[rennigade]

thanks spambot

[Nutria]

or b) Use a credit line (credit card) to cover those costs, knowing that he will eventually be able to pay off the credit line from income he hopes he will receive later on.

That's still living paycheck to paycheck.

(We have the cash on hand, yet still use a credit card for the "points".)