There are many reasons why economists link consumer spending to the strengthening of the economy. First of all, economists are not always indicating that more spending leads to a stronger economy… sometimes they mean the opposite. They infer that IF people are able to spend more money, it must mean that the economy is improving. That being said, there are of course reasons why people spending money can help the economy. Spending money creates jobs and helps people keep the ones they have. If no one is spending money, companies will lose money and will ultimately have to cut jobs. Consumerism also boosts tax revenue to the government and provides funds which they can, in turn, use to stimulate the economy through various means they see fit.
Another reason is that people just want more money. My mom works in a high position at a large bank. her and all of her colleagues who have to deal with these large companies (and actually see how much they are profiting) are always talking about how the companies are not nearly as bad off as they make it sound. CEO’s just don’t want their paycheck to continue to rise. These large companies get most of their work done overseas where their workers make hardly anything. Plus spending did not go down as much as some of the media would have liked you to believe. A large part of this depression is just caused by greed.
Consumerism is not the answer to fixing our economy, it is just what the common an is lead to believe.
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