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URL:  http://boards.fool.com/if-everyone-did-this-our-economy-would-be-12329461.aspx

Subject:  Re: Ten Mental Exercises Leading To Freedom Date:  4/3/2000  11:51 AM
Author:  hocus Number:  7383 of 744608

If everyone did this, our economy would be ruined.

It seems to be a commonly held idea that people must waste money for our economy to thrive. I don't see it this way, but I'm willing to be persuaded if someone can present an easy-to-understand explanation of how this works.

To my way of thinking, wasteful spending can never be a good thing. Let's say that 80 percent of the population decided tomorrow to stop ordering take-out pizza and instead make their pizzas at home. What would happen to the economy? First of all, there would be fewer take-out pizza joints, that's true. But I don't see that as a bad thing. It's just consumers voting with their feet (or mouths) for fewer take-out pizza joints, and the market economy responding by giving them what they want.

Those jobs don't just disappear into thin air, though. All the people that used to be employed at pizza joints would now look for work in other fields, fields where the market economy is telling them their services will be more valued. Perhaps they will become dog-walkers, or kindergarden teachers, or pottery-making instructors. It doesn't matter to me what they choose to do so long as the new work is more useful and less wasteful.

Of course, if enough people begin saving large amounts of money, that group will indeed give up working in the paid economy altogether. But again, I don't see this as a bad thing. They will still be alive. They will still be doing things. And they will have the money to do things. If they golf, they will help the golf supplies industry. If they plant gardens, they will help the seed companies.

Where is the damage to the economy that everyone talks about? If it is really true that our economy depends upon people making bad spending decision, then I hope it does fall. But I don't see that this is a necessary consequence of a trend toward frugality. The advertising industry might get hurt. But if advertising is causing poor decisions, wouldn't it be a good thing for the economy for the resources being devoted to the advertising project to be
redirected into something more useful? What am I missing here?

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