There is a fascinating concept called The Paradox of Thrift developed by John Maynard Keynes. This concept states that in a time of recession if we cease to spend, it will only drive us further into recession. It makes sense right? So in a time of recession when we need to do life smarter, what should we invest in? I say, invest in yourself.
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Great post Jerad. I was thinking about this the other day watching the ‘gloom and doom’ news.
Agreed, the phenomenon of deflation can be just as bad inflation.
The economics of John Maynard Keynes are the very reason we are in the mess we are in. The fools steering the ship of state are all followers of his…but for one man named Ron Paul. When we have fake money that is manipulated by the federal reserve ( not federal, no reserves ) we will always have bubbles and recession. We MUST stop spending as the “keeping up with Mr & Mrs Jones” is an unsustainable endeavor. Should we crawl into a bunker and wait for Armageddon? NO! But, we should not delude ourselves with false hope that the very people that created the current economic climate will in any way do anything to fix it. If anything can be learned from history it is that politicians are more likely to betray us than serve us. Spending money on “programs” will not stimulate an economy based on consumerism. What will is more consumerism and to accomplish that we need to have a liquid supply of cash that we can borrow to continue to buy the things we don’t need. Consumer spending IS the answer…but not when it takes inflationary policy of printing more money to do it.
Good thoughts!