Will people stop spending?

There are plenty of things to worry about these days, but somehow the idea that Americans will permanently stop spending money on more clothes, cars and gadgets than they need seems one of the least of these. According to the S.F. Chronicle, some economists are worried that the “new frugality” will become a permanent habit. For the past few months Americans have been spending less than they did last year. Perhaps some of them are enjoying it and will never succumb to the temptation of one more pair of shoes again, but history tells us that this has never happened in the past. During the mid-19th century when manufactured goods became available to most families, they started buying them. Spending dropped during every depression, and some people never were able to join in the spree, but those who could started buying again whenever times got good. A new generation grows up every fifteen years or so and the cycle begins again. Let’s worry about real threats like global warming, nuclear proliferation, and state budgets. Frugality will never become a real threat to the economy.

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