Or, do the thing of encouraging others to spend, but saving yourself. When others spend on your goods it is good for you. This is basically what all advertising encourages–it encourages people to spend what they have on a company’s products, for the good of the company–and if the customers benefit or not is not necessarily part of the equation.

The 1920′s bubble and the Japanese bubble were artificial booms caused by central banks printing too much money. People were savings but nowhere near enough to support these giant investment booms. Savings don’t cause bubbles, printing presses do.

Employers pay their workers their estimated marginal product – the extra value their labor
adds to the product given the capital (machinery, etc.) the workplace uses.

Henry Ford did NOT use the reasoning that SBT (and many others) suggest. That wouldn’t make any sense because his workers aren’t buying a new car every year and they were only a small portion of his market. If he wanted to entice them to buy Fords, it would be cheaper for him to give them a discount – which is what car companies do – NOT pay them the price of the car.

Please investigate economics and the topics of marginal cost.

I think the problem rests with a combination of two major points.

1) The USA is a country of waste and instant gratification. We want things because others have them or because they look, as my girlfriend says, “pretty”. Whatever pumps the happy chemicals into our brains, we want in the USA. However, that is the real problem. Instead of investing in technology and items that make life WORK at the most efficient level, we’re running around spending money on the flavor of the week items because our neighbor has what we don’t.

We love our independence in the USA but we’re all so dependent on the wants and desires of others it’s pathetic.

2)Corporate greed. Henry Ford had a revolutionary idea when he realized that paying workers enough to buy the product they create is how it really ought to be. The skills required to make something should be of equal value to the product that is created, not less. Simple as that.

It seems to me that the “scarcity mentality” is caused by problems of real scarcity. When companies pay their chief executives 400 times what their average worker makes, and real wages, adjusted for inflation, are stagnant to falling, people naturally are experiencing actual scarcity. The generation coming into the workforce today is perhaps the first generation since the Great Depression where children are likely to be in a worse economic position overall than their parents were.

Henry Ford figured out a long time ago that if he wanted to mass produce and sell lots of cars, he needed to pay his workers enough to be able to afford cars. He substantially raised his workers’ wages. If corporate America were really concerned about selling more product, and sustaining the world economy,they would be raising wages worldwide, rather than enriching themselves at the expense of their workers. They do depend on the masses to buy their products. It should not be the government’s job to throw a little money at people to stimulate the economy. It should be evident that people will not buy what they can’t afford for long before they go broke. And broke people can’t buy much. When will they realize that they are shooting themselves in the foot by hurting their workers. Mink coats don’t trickle down.

Folks, this is an extremely complex, artificial and self-propelled mechanism we humans have developed that we call “market economy.” I for one, have difficulty seeing its sustainability as natural resources are used up. Necessity driving invention has given way to invention driving necessity, which is otherwise termed “want.” Want is a flawed base upon which to build an economy because human want is never ending. It is a system that goes on and on and on creating its on slaves and slave masters. As long as humans can think, dream and desire (WANT), products will be created. Can anyone help me visualize a fix for what is an apparent problem to me. I too am on this merry-go-round spinning so fast I can’t jump off, lest I destroy myself. Market economy is the new feudalism.

The truth is that we all have to find some sort of balance. Hold back some water so that we can avoid a drought. Build up our dams (with knowledge) so that we can handle when rain does come. But still let some water flow because it’s good for everybody and prevents stagnation.

The banks would have to stop taking in more deposit because it will put them out of business.

But in the real world. This is not going to happen. No matter how hard we try to urge people to save money, there will be still merely 10% of the population do that.

This is completely wrong.

It goes ‘people no buy, companies no income, company realise they selling wrong bluddy product, develop product that people DO buy, company gets income, company hires workers, yada yada yada.”

Consumer = sucker.

There’s no rule that you HAVE to buy something just because it’s for sale. It’s not MY fault that someone has entered the market place with ANY product, or group of products, which it isn’t in my best interests to buy.

Need does not make a claim.

Your need to sell your product entails no claim on my wallet.

Frugal people still buy stuff, they just buy frugal things not flashy, wasteful things. Honestly, I think that the global economy could do with more trade in frugal, efficient, USEFUL things than flashy, useless trash that does nothing but look good and die young.

Haven’t you got the message yet? This ISN’T GOING TO LAST.

1. The central banks around the world have recently injected 200 billion + money into the banking system. See – you’re savings is irrelevant to the grand scheme of things.

2. Speaking of central banks, when you can print and create an infinite amount of “money” with printing presses or digital entries in a computer, the whole relevancy of your savings is muted.

Spending is what drives the economy, keeping money in savings doesn’t really do much for anyone.