Economic times have you saving money? Thanks for making things worse!

[Subdivisions]

http://online.wsj.com/article/SB123120525879656021.html">Hard-Hit Families Finally Start Saving, Aggravating Nation's Economic Woes

BOISE, Idaho -- Rick and Noreen Capp recently reduced their credit-card debt, opened a savings account and stopped taking their two children to restaurants. Jessica and Alan Muir have started buying children's clothes at steep markdowns, splitting bulk-food purchases with other families and gathering their firewood instead of buying it for $200 a cord.

As layoffs and store closures grip Boise, these two local families hope their newfound frugality will see them through the economic downturn. But this same thriftiness, embraced by families across the U.S., is also a major reason the downturn may not soon end. Americans, fresh off a decadeslong buying spree, are finally saving more and spending less -- just as the economy needs their dollars the most.

Usually, frugality is good for individuals and for the economy. Savings serve as a reservoir of capital that can be used to finance investment, which helps raise a nation's standard of living. But in a recession, increased saving -- or its flip side, decreased spending -- can exacerbate the economy's woes. It's what economists call the "paradox of thrift."

-snip-

In Boise, families like the Capps and Muirs illustrate the paradox. This metropolitan area at the foot of the Rocky Mountains is home to a half-million people and is a base for electronics manufacturers such as computer-chip maker Micron Technology Inc. The area weathered downturns in the early 1990s and 2001, with unemployment rates remaining well below the national average. But now people here are socking away money they once would have spent, contributing in part to failing stores, shuttered restaurants and rising unemployment.

-snip-

So, for Pete's sake! Stop saving your money because you're making things worse!!!11!

Edited: Oh, and there's this too: http://www.latimes.com/business/la-fi-thrift2-2009jan02,0,2083247.story">New safety rules for children's clothes have stores in a fit - Thrift stores will no longer be allowed to sell children's clothes. Unless stores test each item for toxins, it all has to go to the landfill.

[Veritas_et_Aequitas]

1. Yeah, I love that meme.

Households are damned if they do and damned if they don't in recessions/depressions. Keynes realized that and that's why he endorsed counter-cyclical government spending to pick up the slack in tough times.

[TheKentuckian]

2. I'd like to save but that's become about impossible.

thanks Ronnie and Dubya!!!!

[JDPriestly]

3. I have to save money right now -- at least until I get my bail-out.

No choice. You can't spend what you don't have.

[nevergiveup]

4. When you are 60 and just lost

40% of your retirement it is difficult not to become thrifty. It is amazing how much tooth paste you squeeze out when the tube appears empty.

[lamp_shade]

12. I hear ya... nest egg is down 60%. I WAS 4 years from retirement. Not any more.

[EconomicLiberal]

5. What did you expect from a repuke paper like the WSJ?

Blaming the victim is always their first course of action.

[depakid]

7. About the same thing one expects from others who won't critically think.

You end up victims to your own wilful failures to learn.

[taught_me_patience]

6. When you've lost thousands in the stock market

it's hard to get in the mood to spend more money. I'll do whatever the fuck I want with my money and I prefer to save right now.

[Pirate Smile]

8. They should focus on the rich people pulling back. My rich in-laws cut the X-mas $$$ they give the

grandkids in half this year. It is completely understandable but it did end up cutting in half how much $$$ got spent after Christmas.

Because of the huge drop in the stock market, people who normally feel immune from recessions and economic downturns don't feel that way this time - because their net worth literally plunged.

I think the well-off cutting back is a big part of the pull back in spending because they were they ones who could always afford to spend (they still could if they wanted to) but now they are spooked.

[pansypoo53219]

9. i'll spend

when georgee is gone.

[TahitiNut]

10. Do they want us to take money OUT of the banks??? Huh? I thought the banks NEEDED money.

What was this thing about "liquidity"?? Or do they want us to go into more DEBT? But ... but ... the banks aren't LENDING is what I'm told. I wish they'd make up their minds.

When the working class gets paid less and less and less for THIRTY YEARS, what the fuck else do they expect?

When those jobs disappear and even fewer can get work, what do the fuckinh expect??

When the "owners" take the increased PROFITS from fucking over the working class and send those profits to China to rebuild the plants disassembeled here, maybe they can just move to China WITH their money and enjoy the "good life" they're creating?

:grr:

[Subdivisions]

14. It's infuriating alright. n/t

[aquart]

11. But children's clothes cost a fortune!

Oh, this is huge suckage.

[corpseratemedia]

13. FU wsj

saving=dissent

I'm sick of the outsourcing/low wage investor crowd projecting the blame that belongs to them for their own failed policies.

[redqueen]

15. Hah... I knew that would be from some rag like the WSJ.

:rofl:

[DS1]

16. Ha! I've been watching old Top Gear episodes

and the newer cars (to me, 2002 and later) look wonderful.

But there's no way I'm dropping cash and signing up for payments these days. Sorry, car makers.

[RB TexLa]

17. Why aren't people who do this being degraded like the 3M CEO for not putting their country first

Seems these people think something else is more important than countries. :shrug: