Is An Economic Collapse A Self-Fulfilling Prophecy?

When people fear a collapse, they don't spend. Would enough fear of a collapse cause one?

A Fox News poll recently emerged that gave me serious pause. Remember, folks--this is a POLL, not a news story, so eye rolling and muttering about fair and balanced won't help here.

The thing is, that right now, according to that poll, seventy nine percent of voters think the United States economy could collapse. Seventy two percent of Democrats polled think that, eighty four percent of Republicans, and eighty percent of Independents all aggregated together to get that seventy nine.

What's worse, a decided minority (thirty five percent overall) think the Obama administration "has a clear plan for fixing the economy".

There's an old saw about something called The Paradox of Thrift. Essentially, it posits that the more people save, the more damage they do to the economy. Savers don't spend, you see--and the more people save, the less they spend, which in turn means lower sales system-wide and, ultimately, job loss. That's part of why old George Dubya was so quick to tell everyone to go shopping after 9 / 11. Part of it, anyway.

So if most people believe the economy could collapse, what will they be more likely to do? Save money...or spend money? It's probably not spending, unless it's on stuff they very clearly and sorely need.

If enough people believe the economy could collapse...then the chances of it doing just that increase to disastrous levels.

Your code to embed this article on your website* :

*You are allowed to change only styles on the code of this iframe.


Add your Comment