Can individuals really jump start the economy?
Remember the stimulus checks? Did that help the economy or did that simply slow the bleed?
I have been going to movies, eating out and drinking like I have been. By keeping my regular routine am I helping the economy?
Spend money to make money...
Answers
2222 points
readytoretire answered 9 months ago …
The stimulus checks last year did help the economy, for a while. Some of the money was not spent, but used to pay down debt. That will help in the intermediate and long term. The stimulus kept the GDP from going negative until the fall quarter.
By spending, you are helping the short term economy. Cities have a multiple (from 5-20, depending on the city size) of how much money spent means to the local economy. So for the very local area , you are helping. Just needs a few million more with the means, and the will.
321 points
charlo answered 9 months ago …
it depends on the country too.
if you have a heavy consumer-dependent economy i.e. the US, then yes, whereby consumer spending accounts for over 50% of national economy. unfortunately, given the immense purchasing power US citizens have against the world, it has a vicious cycle aspect to it which we're currently in. in a recessionary period you want people to spend more and more, unfortunately most of these spending mindsets are dictated by sentiment mainly influenced by the media where they tend to overplay negative news (not right now though. things are that bad). consumers cut spending because they generally assume that their purchasing power will decrease in the near future by various means like stagnant salary, rising interest, etc. as consumer spending decreases, companies end up lowering their forecasts in the future, and so on and so forth.
export oriented countries function a bit different whereby they need consumer oriented economies like the states to consume imported goods. that makes them highly dependent on foreign markets where a country like US stops spending, you have half of the world suffering because their domestic demand isn't strong enough to sustain their home market, since those companies will end up having a surplus to accommodate foreign and domestic markets.
4075 points
EthanR answered 9 months ago …
Chidog, you work, you save, you spend. You are definitely helping the economy! If everyone did what you are doing, we wouldn't be in the soup right now.
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896 points
jillybeansisme answered 9 months ago …
Yes, you are most definitely helping the economy as long as you are doing it with cash and not long-term credit. Long-term credit debt is a good portion of the problem we are facing. Now, if we could just get our politicians and corporate executives to do their collective parts (instead of looking out for the lining in their own pockets)!
I urge all of us to take any refund checks, unexpected windfalls, or other extra income and use 90% of it to pay down debt and 10% for spending. We get our issues turned around faster.
