Credit Score News, Tips & Advice
Website CertifiedPrivacy Protected
Credit Score News, Tips & Advice « Credit Scores > Credit Score News > Recession Calls For Usual Spending On Goods And Services

Recession Calls For Usual Spending On Goods And Services

By Sally Maison
Published: Tuesday, June 22nd, 2010

73212320With employment figures reduced to one-fourth of what it used to be last April, US stocks close lower starting last Friday. Another country, Hungary, reports that it is in the brink of a financial crisis and the world market is beginning to become volatile once again.

One of the hardest hit stocks were those of retailers. Investors suppose that weaker job markets and high unemployment rates will most likely discourage people from spending on unnecessary items. This will compel consumers to buy less. And while spending less assures people that they will have enough money left for further uses, it is not the best way to help the economy. Adopting this kind of mindset might further degrade the current status of the economy.

Credit analysts say that spending less will not do the economy good. Businesses are dependent on consumers. And if the people will refrain from purchasing to be able to save enough money until they find a job, then the economic process will not work since there are no customers who will purchase products and services. And if this happens, more businesses will close because of the losses incurred.

Also, people who are currently experiencing debt crisis must learn from the same experience. It is most advisable for them to engage in their usual financial transactions. Bad debt will not be erased by becoming idle. Rather, it will be offset by the number of good transactions that is made by the person. Furthermore, doing so will bring triple benefits the three players in this transaction: the debtor, the business owners, and the economy. While the debtor is able to accumulate good credit, the businesses are also able to earn from the purchases of good and services, and the economy benefits from the increased productivity of the market sector.

In order to prevent financial stocks from further falling, borrowers must make it to a point to pay dues on time. In time of financial crisis, the last thing that people must think about is how to save the money they have and stretch it for the longest possible period. What must be done instead is to encourage economic activity by buying the usual items and availing of the usual services. In the end, the economy will be able to recuperate from the losses and things will be better soon (than in a place where people prevent themselves from spending during fiscal crisis).

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.