Your Spending Drives the Economy

Economics, specifically microeconomics is the study of how consumers and producers make their decisions. This includes three major players: the consumer, business and the government. All three of these players are important in making the economy run smoothly and efficiently. When one or another of these players does not spend money the economy comes to a halt. This happened in 2008 with the real estate bubble. Because banks had not reflected the true value of their real estate assets the market crashed and consumers saw 1/3 of their wealth evaporate. With this reduction in wealth consumers couldn’t spend. That left it to business or the government to spend money. In 2008 businesses did not step up to the plate and spend the money that needed to be spent in order to keep the economy rolling. That left it to the government. If the government had not spent the money they did at the time, then the economy of the entire globe would have come to a screeching halt. You remember this right?

Business could have spent the money. Banks could have spent the money. They didn’t. The bailout money the government gave them to help spur the economy, they kept. All this is said to emphasize what power the consumer has to direct the economy. Where we spend our money. Where we keep our money. These decisions affect the direction of the economy. Why do you think you get ads on your computer, on your FB page, in your email, on your phone, on the radio, on billboards? It’s because businesses are vying for your money. They need you. If you don’t spend your money they don’t survive. So spend it wisely.

Spend your money at those businesses that support your values, that support your community, your region of the country. You want to know why the Rust Belt voted for Trump? It’s because he identified with the reality that nobody is spending money in those regions. No businesses are spending money in those regions. You want your region to come back economically? Quit waiting for someone else to fix it. Take the money you have and spend it in your community. Quit shopping at Walmart, they’re based out of Arkansas. You want your money to go to Arkansas? Quit buying Budweiser. That money goes to St. Louis. Quit buying from Amazon. That money goes to Seattle. Get to know your community. Drive around. Stop in those businesses. Find out what they sell. Buy from them. Don’t shop online.

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