If everyone is the U.S. doesn't spend money, but saves money, what would the economy be like?

Question

Will everyone be rich through saving?

Answer 1

Production would go down because people wouldn't be buying ipods, bicycles, new gym shoes, or other things. Because production is way down, companies would start laying people off. Stocks would go down because company revenue would be down. There were be tons of unemployed people that wouldn't have money to either save or buy things with. If people can't pay their mortgages, they would foreclose like crazy.

You can't go from one extreme to the other. Neither extreme is good for any of us. There has to be a happy medium where we are spending less than we have been and saving more than we have been.

Answer 2

If everyone saved their money, and noone spent, there wouldn't BE an economy. The economy is about money as it works it way through the people. Why do you think the goverment spends millions a year to promote spending by us?

Answer 3

We wouldn't be on the verge of an economic collapse. You have no idea how bad it is. Few people look at the big picture. It's a 52 trillion dollar debt(social security-44trillion and trade deficit-8 trillion).

Negative savings rate for the first time in history. Yeah everything LOOKS fine because we keep borrowing from Asian countries to stimulate business, but what's going to happen when they start demanding higher interests because the dollar keeps going down.

http://www.amazon.com/Americas-Bubble-Economy-Profit-Pops/dp/047175367X

Answer 4

Stagnant. Money needs to flow or its useless. If you (and everyone else) are saving every penny you make, then whoever would have gotten it doesn't. That guy doesn't have anything to save, and just as important, he doesn't have anything to spend. That means that the next guy down the line from him suffers too. Maybe the next guy down the line was going to be the company you work for, who now isn't making any money to pay you with, so they lay you off. Now what are you going to save?

Answer 5

If the change were absolute, it would cause a depression. In other words, if consumers stopped spending, it would cause the economy to tank. As it now stands, U.S. consumers aren't saving much at all, by traditional measures. Others around the world, fortunately, are financing our budget and trade deficits.

Answer 6

I am not sure but if no one ever spent money, Ithink the economy would fail. Business would no longer make any money to pay salaries to its staff so everyone would loose thier jobs. But I am no economic major and may just be showing my stupidity. It's just how I feel I could be wrong.

Answer 7

well, you cant save every penny, because you need to survive, eat, pay for internet, pay rent, etc, so that is a weird question, but if everyone saved their money, it would become worthless and we would all be stingy and die. or we could live the united order and just do stuff for free and not have any money changing hands. we would just have what we need to survive and do our jobs for free, I would really like that kind of life, I really dont care for money and I never want to be rich, I just want to provide for my familys needs.

Answer 8

In the short run it would be messy and hard, because we would be making a radical change back. But in the long run we would be a lot better off. Our forefathers made America great through good values, thrift, and saving.

Answer 9

NOPE.

We would all be on the street for
failure to pay monthly mortgages,
and monthly rent.

While on the street we would be
chased by agents of the IRS
for failure to pay Taxes.

Most major corporations would
have to file bankrupcy for lack
of sales.

Menial services such as garbage
collection and so forth would be
done by lawyers because clients
failed to pay their bills.

Most congressmen would be on
the street also having been kicked
out of ofice for failing to pass laws
against saving money.

Answer 10

The economy would suck.... it would actually create a recession.

However, there's not much danger of that happening... instead we tend to run up credit card bills which keep us paying into the economy (with interest!) for a long, long time.