What if EVERYONE was frugal?

[thekid]

Companies would not be making very many profits because people would not be doing very much spending. If world wide consumption by individuals, corporations and governments was restricted to an absolute minimum of what is strickly necessary.......we would be in very serious trouble. Basically, standards of living would be pushed back to the middle ages if not worse. Commerce and trade are good things for our overall economic wellbeing. If no one and no organism was geared towards growth and expansion, we would pretty much all be subsisting farming on our own little backyards pretty soon. If EVERYBODY was frugal would be quite a nightmarish scenario.

The trick is for you to be frugal while others are not

[Bookie]

• Used cars would become very expensive. Frugal people don't buy cars new.
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• Shoppers would camp overnight outside grocery stores to get the weekly specials. Fights would break out over the BOGO stocks as they were depleted by penny-pinchers.
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• Interest rates would plummet as banks, bloated with savings advertised for borrowers in a frugal economy. Pushed to the brink of ruin, bankers would start to charge interest on savings deposits to survive.
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• Foundering restaurant chains would publicize their doggy-bag specials -- Dine out once, eat for a week.
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• Dumpster diving would be recognized as an Olympic sport. ESPN would televise matches between pro teams competing on every level for recycleables. The sport would be rocked by dumpster-salting scandals.
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• Inner-city housing prices would soar as commuters fled the suburbs for the economy of a dwelling close to the workplace. The displaced slum-dwellers would squat in abandoned MacMansions, ripping out lawns to grow vegetables.
  

[shelbylovesmelby]

The Yugo's would rule the roads again! *LMAO*

They even redesigned the bugger again! Doesn't look half bad!

[scfr]

Originally Posted by Sweepsplayer

Maybe there would be a web site called SpendingAdvice.com where the members criticize all the frugal people in the world and scheme up secret ways to spend more money. The main poster on the site would be Ima Spender.

too funny
And I'd have to change my user name to scfp

[amberfocus]

Originally Posted by thekid

Companies would not be making very many profits because people would not be doing very much spending. If world wide consumption by individuals, corporations and governments was restricted to an absolute minimum of what is strickly necessary.......we would be in very serious trouble. Basically, standards of living would be pushed back to the middle ages if not worse. Commerce and trade are good things for our overall economic wellbeing. If no one and no organism was geared towards growth and expansion, we would pretty much all be subsisting farming on our own little backyards pretty soon. If EVERYBODY was frugal would be quite a nightmarish scenario.

The trick is for you to be frugal while others are not

Agreed. Many companies that sell non-necessities would go out of business for lack of sales/profit, and the stock market in those sectors would take a dive, as well.

I am not an economist, but it makes sense to me that stock market investments grow when the companies grow, and companies grow because they are making a profit by selling their products to consumers. And these consumers are generally spendthrifts, although there are products that everyone uses.

If you're employed by a company, that company can only afford to employ you so long as they're in the black, financially. And that is also thanks to consumers who buy their products, as well as the investors whose money helps the company grow by marketing its products to more consumers.

If you're employed by a government agency or another tax-funded institution, you're supported by taxpayers. Taxes are levied on income (of which frugal folk prefer to pay less), and, again, consumerism (aka sales tax).

In the end, all of your money comes from other people. Once they stop spending, you stop earning.

All this is a guess on my part, since I have no econ background whatsoever. But it seems to me that frugality is only meaningful in a relative context. If everyone is frugal, then no one is. All of the economic benefits of frugality would be lost.

The environmental benefits are another matter, of course. But waste, in the end, still leads to more consumption. So I don't really know.

Very interesting question.

~mimi

[Broken Arrow]

Originally Posted by shelbylovesmelby

The Yugo's would rule the roads again! *LMAO*

They even redesigned the bugger again! Doesn't look half bad!

Wow, I remember back in high school, and my friend's older brother had one.

It's was an awesome little ride back then. But then, since he was the only one with a car at all, any car would have been awesome.

It also broke very quickly though. I remember that he didn't have it but like, two years, before they had to get rid of it....

[mountainmist]

Originally Posted by jodi

AHHH! Scary thought - there's be no more thrift stores or garage sales because everyone would use and reuse their items until they no longer had any use in them. So we'd all have to buy things new (only the things we couldn't make or grow ourselves, of course)...but wouldn't prices be driven to the rock bottom if we were all so frugal that we wouldn't buy the big ticket items?
Which means...the market for luxury items would disappear...there would be less options in groceries, clothing, even entertainment. We might have to go back to the days of...gasp...conversation, reading, and playing games! (which is a typical night around here anyway)

I agree, our entire society would change radically, consumer culture would disappear. I also think that work as we currently know it would disappear, as so many purchases are nowadays based on false needs, people wouldn't NEED two income families.

I can't even imagine what new immigrants to the USA seriously think when they observe all the many items we throw away while they are still servicable, if not totally brand spanking new.

It's depressing to think about our silly frivolous consumer driven culture.

[mountainmist]

Originally Posted by jodi

AHHH! Scary thought - there's be no more thrift stores or garage sales because everyone would use and reuse their items until they no longer had any use in them. So we'd all have to buy things new (only the things we couldn't make or grow ourselves, of course)...but wouldn't prices be driven to the rock bottom if we were all so frugal that we wouldn't buy the big ticket items?
Which means...the market for luxury items would disappear...there would be less options in groceries, clothing, even entertainment. We might have to go back to the days of...gasp...conversation, reading, and playing games! (which is a typical night around here anyway)

I agree, our entire society would change radically, consumer culture would disappear. I also think that work as we currently know it would disappear, as so many purchases are nowadays based on false needs, people wouldn't NEED two income families.

I can't even imagine what new immigrants to the USA seriously think when they observe all the many items we throw away while they are still servicable, if not totally brand spanking new.

It's depressing to think about our silly frivolous consumer driven culture.

[b4freedom]

Our economy would look like Germany's.

[Broken Arrow]

I think this does illustrate an important point though: That the US is a huge consumer market.

As such, no suppliers out there wants our economy to collapse. Such a shockwave would be felt world-wide.

However, I still think the national deficit and spending is in dire need of a "Dave Ramsey Total Money Makeover".

[Bookie]

Originally Posted by Broken Arrow

I think this does illustrate an important point though: That the US is a huge consumer market.

As such, no suppliers out there wants our economy to collapse. Such a shockwave would be felt world-wide.

However, I still think the national deficit and spending is in dire need of a "Dave Ramsey Total Money Makeover".

So we cut all unnecessary spending and assemble an emergency fund of a thousand million dollars.

Then we list all our outstanding national debts in order, from smallest to largest.

Making minimum payments on all the others, we . . .

BA, I don't think this is going to work.

[Broken Arrow]

Read my lips: "NO NEW SUBSIDIES!"

[lrjohnson]

Originally Posted by amberfocus

In the end, all of your money comes from other people. Once they stop spending, you stop earning.

I agree that my earnings comes from taxes. And that my very job, in the welfare business, may not be needed if everyone is frugal.

However, my non-economics oriented mind can see this potentially being a good thing. What if everyone's hours were cut to 30 hours a week for full time? Well, if we are being frugal we may be able to afford that right? I myself today would rather take a 25% pay cut and 25% hours cut if it was an option. We'd have more time to do frugal things, as well as more time to enjoy our families, our hobbies, our homes.

[rob62521]

Gosh, who would we write about if everyone was frugal? It would make less interesting threads!

[Marcymox]

if everyone I knew was frugal- I'd sure have a heck of alot of friends. - everyobody would be like me. Wow. - so cool.

it would be great... But, there'll be a lot of competition on who'd get the least expensive travel ticket.

[abowers]

There wouldn't be ridiculous housing developments everywhere with 4,000+ sq foot houses, and everyone wouldn't own a luxury SUV, they would own compact or mid-sized cars that were more affordable and fuel-efficient.

[disneysteve]

Originally Posted by abowers

There wouldn't be ridiculous housing developments everywhere with 4,000+ sq foot houses, and everyone wouldn't own a luxury SUV, they would own compact or mid-sized cars that were more affordable and fuel-efficient.

But what about people who earn really high incomes? Assuming there would still be pro athletes and actors and executives earning 7 or 8 figure salaries, they could buy those McMansions and luxury cars and still be living well below their means. Frugal doesn't necessarily mean cheap.

If I earn 50K and buy a car for 15K, that's 30% of my income. But if I earn 1 million and buy a car for 50K, that's only 5% of my income. Which is more frugal?

[abowers]

Good point.

[rob62521]

Not being frugal this afternoon, but nosy, we drove around and couldn't believe some of the houses that have been built or are in the process of being built in and around our community. For our city, anything over $200,000 is pretty much considered luxurious and these are $300K and $400K+ homes. With our economy locally being a total mess, I'm curious who can afford these puppies and the upkeep. We have lost two more employers in the last month that although they weren't huge paying jobs, they were above minimum wage with some benefits. Either these folks know far more than I about money which wouldn't surprise me, or they are so in debt they will never see daylight...I don't think they are being frugal one bit.