Time magazine’s front cover proposed the idea of a “New Frugality” in the United States. Time has also talked about how the “Great Recession” is impacting individual people. Anecdotal evidence on people is shown as evidence of how people are coping with this recession. It is interesting to note that in 1973 Time ran a similar story about the New Frugality during that period (Notice that this article quotes Alan Greenspan and Arthur Okun).
The paradox of thrift might be playing a role in this all as people are deciding to save more even when their wealth or income might not be rising.
Questions you might try to answer:
- Do you think that there is a “New Frugality” or is this simply a change in current behavior due to the present economic conditions?
- Do you believe that Americans will return to their free-spending credit driven consumption in the near future when this crisis subsides?
- What role do you believe the “Paradox of Thrift” is playing in the current economic crisis?
- Do you believe that these issues of frugality and increased savings has an impact on the ‘multiplier effect’ that is a key behind Keynesian stimulus plans?
I would like your statements to be as subjective as possible, or in jargon terms, positive and not normative in nature. Also, remember, I want you to keep your descriptions short, basic, and related to classroom content. Read other students comments before posting, and please leave your name with your posting.