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If our economy works on a voluntary spending system...

C

CallTheFBI

Banned
Since our economy works on a voluntary spending system, where consumers don't have to buy products if they don't want to, what would happen if everyone decided to just stop spending? Excepting bare necessities of course like food, clothing and housing. In other words could people keep earning if no one was spending?
 
Originally posted by: Atrail
No, jobs would decrease greatly in number....
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Based on that premise saving money is actually a bad thing which doesn't make sense. Why isn't this making any sense??!!

 
That is correct. Saving money, takes it out of businesses sales. Sales go down, people lose their jobs.
One reason why our economy is so big. No one saves money it all goes back to the businesses.
 
Originally posted by: Atrail
That is correct. Saving money, takes it out of businesses sales. Sales go down, people lose their jobs.
One reason why our economy is so big. No one saves money it all goes back to the businesses.
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What?! Everyone knows that saving money is a good thing, it is a must if you want to have a decent retirement. Are you telling me that if I save my money the health of the economy goes down a little bit?

 
A balance of savings and spending is the key. You should have some savings for those rainy days, but not so much savings that the money is not flowing back into the economy.

Hopper
 
Originally posted by: CallTheFBI
What?! Everyone knows that saving money is a good thing, it is a must if you want to have a decent retirement. Are you telling me that if I save my money the health of the economy goes down a little bit?
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In the short run, yes... In the long run, no...

Save money in moderation, but don't stop spending money either.

Hopper
 
Originally posted by: Grasshopper27
A balance of savings and spending is the key. You should have some savings for those rainy days, but not so much savings that the money is not flowing back into the economy.

Hopper
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Hmm, so I see. Its like one big symbiotic relationship. And what of this consumer debt I hear about? If people screw up their finances does that affect everyone else in the economy too?

 
Originally posted by: CallTheFBI
Hmm, so I see. Its like one big symbiotic relationship. And what of this consumer debt I hear about? If people screw up their finances does that affect everyone else in the economy too?
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Yes, that is one way to look at it.

If too many people rack up consumer debt, then they won't be able to keep spending as all their income will go to paying back the debt. Bankruptcies will also go up which don't hurt too bad if they are few in number, but if too many people do it at once, it can be hard on the financial business.

Hopper
 
Originally posted by: Grasshopper27
Originally posted by: CallTheFBI
Hmm, so I see. Its like one big symbiotic relationship. And what of this consumer debt I hear about? If people screw up their finances does that affect everyone else in the economy too?
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Yes, that is one way to look at it.

If too many people rack up consumer debt, then they won't be able to keep spending as all their income will go to paying back the debt. Bankruptcies will also go up which don't hurt too bad if they are few in number, but if too many people do it at once, it can be hard on the financial business.

Hopper
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Damn, it really sucks to know my financial life can be damaged by idiots who can't control their spending.

 
Originally posted by: CallTheFBI
Damn, it really sucks to know my financial life can be damaged by idiots who can't control their spending.
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*shrug*

It can also be damaged by idiots who fly airplanes into buildings, no one said life was fair. 😀

Hopper
 
Everyone stops spending money. No one goes to stores and buys anything. Everyone who works at those stores loses thier job because thier store makes no money. They have no money, they can't go to the grocery store and buy food. Grocery store doesn't make any money. Grocery store closes down. Entire economy collapses.
 
Originally posted by: notfred
Everyone stops spending money. No one goes to stores and buys anything. Everyone who works at those stores loses thier job because thier store makes no money. They have no money, they can't go to the grocery store and buy food. Grocery store doesn't make any money. Grocery store closes down. Entire economy collapses.
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No no, I said excepting bare neccesities, like food.
 
Originally posted by: notfred
Everyone stops spending money. No one goes to stores and buys anything. Everyone who works at those stores loses thier job because thier store makes no money. They have no money, they can't go to the grocery store and buy food. Grocery store doesn't make any money. Grocery store closes down. Entire economy collapses.
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Thats pretty much the reason my cities always fell in SimCity. Stoopid Sim-vilians always saving.
 
Originally posted by: CallTheFBI
No no, I said excepting bare neccesities, like food.
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Sure, but does YOUR job involve those bare neccessities? If not, how will you survive without an income?

Spending makes the economy go round, to a point...

The economy is so complex, few people really understand how it works. The big picture isn't even all that well covered by the local news, much less in Econ 101. 😀

Hopper
 
Originally posted by: Grasshopper27
Originally posted by: CallTheFBI
No no, I said excepting bare neccesities, like food.
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Sure, but does YOUR job involve those bare neccessities? If not, how will you survive without an income?

Spending makes the economy go round, to a point...

The economy is so complex, few people really understand how it works. The big picture isn't even all that well covered by the local news, much less in Econ 101. 😀

Hopper
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Yeah, I work at a fast food restaurant. The place is very high traffic, lots and lots of customers. When I work the cash register I ring up around 250 - 300 orders over the course of my shift and that is on my register.

 
Originally posted by: CallTheFBI
Originally posted by: notfred
Everyone stops spending money. No one goes to stores and buys anything. Everyone who works at those stores loses thier job because thier store makes no money. They have no money, they can't go to the grocery store and buy food. Grocery store doesn't make any money. Grocery store closes down. Entire economy collapses.
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No no, I said excepting bare neccesities, like food.
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You dont seem to get it.

Pretend you work in a car stereo store. No one buys any car stereos. How the fvck are you supposed to buy food when you haven't sold any car stereos in six months? The grocery stores can't stay in business by selling only to thier own employees.
 
Saving money is good for the economy as well. Banking and investments are crucial to our economy..
And people can't stop from spending large sums of money, as they have to have food in their stomachs, a roof over their heads (for most people, housing is their largest single expense), and clothes to wear as well as distributors, salespeople, and financing to provide those items. Last I checked, those were still the biggest industries in the US.
 
Originally posted by: Vic
Saving money is good for the economy as well. Banking and investments are crucial to our economy..
And people can't stop from spending large sums of money, as they have to have food in their stomachs, a roof over their heads (for most people, housing is their largest single expense), and clothes to wear as well as distributors, salespeople, and financing to provide those items. Last I checked, those were still the biggest industries in the US.
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Yep, saving is good too...

This is why BALANCE is important... Some saving, some spending... Makes the world go round. 😀

Hopper
 
Originally posted by: notfred
Originally posted by: CallTheFBI
Originally posted by: notfred
Everyone stops spending money. No one goes to stores and buys anything. Everyone who works at those stores loses thier job because thier store makes no money. They have no money, they can't go to the grocery store and buy food. Grocery store doesn't make any money. Grocery store closes down. Entire economy collapses.
Click to expand...

No no, I said excepting bare neccesities, like food.
Click to expand...

You dont seem to get it.

Pretend you work in a car stereo store. No one buys any car stereos. How the fvck are you supposed to buy food when you haven't sold any car stereos in six months? The grocery stores can't stay in business by selling only to thier own employees.
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Oh, ok I see what you are getting at.
 
Ok guys now imagine this. A corporation that has set up a barracks if you will for its employees, just a big compound where each employee lives for dirt cheap. Each employee is saving at least 80% of their paycheck every month. Now how would this affect the economy, maybe not EVERYONE stops spending but like a large block of individuals pretty much duck out of the economy. Would that be bad as well?
 
Originally posted by: CallTheFBI
Ok guys now imagine this. A corporation that has set up a barracks if you will for its employees, just a big compound where each employee lives for dirt cheap. Each employee is saving at least 80% of their paycheck every month. Now how would this affect the economy, maybe not EVERYONE stops spending but like a large block of individuals pretty much duck out of the economy. Would that be bad as well?
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What kind of employees could the company get to work in such conditions? How happy and productive would they be?

People are not machines, which is why such plans tend to not work. It was tried in the Soviet Union, people were amazingly unproductive over there because of it (and other factors of course).

BTW, Greed is good... to a point...

Enron is a good example of the bad kind of greed, when it causes you to start cheating.

GE is a good example of greed, they make a lot of money and play by the rules while doing it.

Greed makes the world go round, you show up for work because of greed (you expect to get paid), companies invest money because of greed (they expect to make even more money).

Taken too far, ANY aspect of the economy is a bad thing, but all in moderation it works quite well.

Hopper
 
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