[jiggy2011]

Good point, to an extent is a vicious cycle.

If you want to get that salary raise, at some point it has to be backed by somebody actually buying something.

If everybody becomes super frugal then the economy shrinks and unemployment gets worse. I guess this is because we're at a point where we don't need anything close to 100% employment to cover everybody's 'basic' needs.

[leeHS]

This is a REALLY good point. The benefits of being frugal are increased when the majority is not. It's sort of the same thing with the birth rate. Our economy will grow as long as we keep replacing the workers.

[jiggy2011]

Yes, the best position to be in is to be the guy who only owns a bicycle but sells ferraris. It becomes difficult to be frugal when other people are because business and government don't actually want to let that happen.

I remember when the recession started in the UK, there was a lot of advice going around to the effect of, "When you go shopping, don't buy brand name foods instead by the supermarket value brand equivalent'.

The supermarkets seem to have responded by simply taking a lot of the value brand products off the shelves or making them only available in bulk quantities.

This has a negative effect on equality. If your business is struggling because the lower and middle class aren't buying your products you must either decide to take lower margins or you will focus your products instead on the remaining people left who do have disposable income and start producing high end products only.