Is an economic downturn really a bad thing?

[Revvy]

So I was browsing BBC news and came accross this article.

"US consumer spending fell by 1% in October, the largest decline since September 2001, in a further sign of the deepening economic downturn."

The article makes out that consumer spending falling is actually a bad thing. But why the fuck? Surely people buying less and wasting less is a good thing and should actually be congratulated. With current economic logic; that spending more and more is a good thing, and that we should aim to infinitely increase our GDP, we're just going to spend our way into destruction.

Of course I know that spending is linked to jobs, but I'm pretty sure that if the consumer culture dies down, and that people stop spending like maniacs, that goods which are being sold will be more expensive and of greater quality. More expensive goods means that people will be paid more per item so nothing will actually change apart from the rate of consumption.

Another thing I was wondering is with regards to this:
"Consumer spending, which makes up about two-thirds of economic activity in the US, had risen 0.3% in September"

If consumer spending makes up two thirds of the US economy, then what an earth is the rest of it made up of?

I get the impression that in the global scheme of things, the strongest 'economy' is the country which produces and wastes the most resources, and being the strongest economy means you have an advantageous position on the global stage with power and exchange rates, etc; that all nations are lead into believing that they must have strong economies so they can appear important, and nobody wants to say 'fuck you' to the leading corporations and businesses and cut down on consumption because it'd be global suicide: a nation's given currency would plummet, your presence would pretty be non-existant on the global stage, and you'd be unable to blanket your population with plastic.

[Aeroue]

Wasting resources does not make an economy strong.

Government Spending, Exports and Corporate spending.

And sure it is bad, people want things. That is why consumer culture exists or course capitalism also helps but really capitalism only exists because of these wants we have. People always want things so why not have a system that works on it it is reliable, to an extent. If you want consumer culture to end you will have to change a lot of people rather than the system first. Unless you want to force people into it.

As everything in the economy is linked to consumer spending if it goes down. Prices either increase to make up for it which then leads to less spending again and so on. Or companies have to cut costs, whether by reducing quality, or output. Output can rarely be cut without job losses. This leads to further drops in consumer spending, this will then repeat until an equilibrium point is met or everything is screwed. However it normally reaches the equilibrium the economy will then start to improve again. But this is the problem everything is linked to spending and small problems can escalate into big ones if they are not fixed and you can never know for sure where this problems will fall.

Why shouldn't we aim to increase our wealth? If we suceed how will it lead us to destruction?

[ReclaimPublicSpace]

The economic downturn is bittersweet. Bitter, because obviously thousands of Americans are losing their jobs or their homes, and more are losing their pension or retirement funds. Sweet, because, well, we'll stop buying so much crap, fueling unethical corporations, creating massive amounts of waste, and wasting massive amounts of what we buy. Best case scenario: The ultimate decline of "consumer culture" and the rise of American culture.

[vazilizaitsev89]

yea...its kinda bad. The 2/3 of the US economy rests on consumer spending. if that falls, that means less output, which means less jobs and it just spirals out of control. And no, a company will NOT jack up prices because demand is low. That would only further cut the demand of said product

[dal7timgar]

Originally Posted by vazilizaitsev89

yea...its kinda bad. The 2/3 of the US economy rests on consumer spending. if that falls, that means less output, which means less jobs and it just spirals out of control. And no, a company will NOT jack up prices because demand is low. That would only further cut the demand of said product

The trouble with statistics is that they often don't provide enough detail. If a 1% decline really means 200,000 lost jobs and no telling when more will be created that might mean 5% in two years. I agree that consumerism has mostly been stupid but no one has suggested mandatory accounting for everyone for the last 30 years.

No one is telling us what we have lost in depreciation on crappy cars for the last 30 years. If 75% of Americans had their homes payed for today and didn't have to pay mortgages a 1% decline in GDP might not matter much. How many college freshman are being sent credit cards and don't know what net worth is?

DT

[My Name is The Lord]

Yes, it is a bad thing you fucking idiots. If and when it regresses you are going to regret making this topic; unfortunately you will not be able to come back and lick your wounds and apologize to the community as Jeff Hunter will no longer be able to run this website. What a great fucking idea! An economic downturn! Do you really want to go back to the days of living off a pasture? Do you not miss the times when consumer goods were actually reasonably priced?

[KikoSanchez]

Originally Posted by My Name is The Lord

Yes, it is a bad thing you fucking idiots. If and when it regresses you are going to regret making this topic; unfortunately you will not be able to come back and lick your wounds and apologize to the community as Jeff Hunter will no longer be able to run this website. What a great fucking idea! An economic downturn! Do you really want to go back to the days of living off a pasture? Do you not miss the times when consumer goods were actually reasonably priced?

I think what OP meant is that a downturn and loss of easy credit humbles people and makes them realize they can't continue their economically destructive ways. The average american is in $10,000 debt...so we obviously aren't making good decisions and are, overall, throwing tons of money toward lenders instead of saving like we should be doing. It also reminds people they don't live in a fairy tale land where they can just go shop, shop, shop all the time, because they are "the chosen ones" to who nothing bad will ever come. There is no doubt the way Americans handle their own finances is astounding at times. Don't believe me? Go talk to people in LA, it's ridiculous how irresponsible they are. Hopefully there will be a savings revolution and philosophical movement away from the continuous cycle of credit and debt.

[My Name is The Lord]

Credit debt is essential for the survival of this nation (USA) and the maintenance of it's ruling throne as there would be no supply if everyone lived within their means which would mean less capital and therefore little import/great export which would reverse how the world works today. It keeps people on their toes, if everyone lived as we did in the 1890's, the luxuries we enjoy today would disappear. We would become China. What would be good for this nation is if it's leaders would adopt the mindset of those such as DerDrache, you cannot fight fire by being a pussy. We ought to be taking control of Saudi Arabia/that entire region of the world right now.

[alooha from hell]

Originally Posted by My Name is The Lord

Credit debt is essential for the survival of this nation (USA) and the maintenance of it's ruling throne as there would be no supply if everyone lived within their means which would mean less capital and therefore little import/great export which would reverse how the world works today. It keeps people on their toes, if everyone lived as we did in the 1890's, the luxuries we enjoy today would disappear. We would become China. What would be good for this nation is if it's leaders would adopt the mindset of those such as DerDrache, you cannot fight fire by being a pussy. We ought to be taking control of Saudi Arabia/that entire region of the world right now.

yes and then we will force them to take out a loan for a brand new house and a new boat.

[Nerd Fangs]

Originally Posted by ReclaimPublicSpace

The economic downturn is bittersweet. Bitter, because obviously thousands of Americans are losing their jobs or their homes, and more are losing their pension or retirement funds. Sweet, because, well, we'll stop buying so much crap, fueling unethical corporations, creating massive amounts of waste, and wasting massive amounts of what we buy. Best case scenario: The ultimate decline of "consumer culture" and the rise of American culture.

This is dumb on so many levels.