Michigan has the highest unemployment rate in the country at 12.6%, and its economy is looking pretty bleak at the moment due to the plight of the auto industry.
I was listening to my usual radio station today, and I heard one of the public service announcements that they've been letting various companies use. This one happened to be for a car dealership. The gist of the announcement was asking people to purchase a new car to get our MI economy moving again. It would provide jobs to the dealership employees as well as the employees that manufactured the car.
I had to stop and think when I heard this commercial. Of course I know many people whose jobs are affected by the slump in the auto industry, and I feel really bad for them. But, should people really go out and make an unplanned automobile purchase just to help the economy? I would argue, "No". Isn't spending beyond our means one of the reasons we're in this economic mess?
So, I started thinking about whether we should spend just for the sake of helping out the economy in general. We haven't really changed our spending habits much due to the economy, since we've always tried to spend within our means and save for an item before we purchase it. In fact, years ago, a friend of mine thought it was weird that we were saving for a new roof for our house before we had it done rather than just taking out a loan.
In fact, we still have about $1300 of our $1800 2008 stimulus rebate left in our money market account. The only reason we spent the $500 was we had a car repair that we used it for. We do plan on using it someday for a Disney vacation, but we want to wait until our boys are old enough to remember it rather than just to stimulate the economy.
What do you think? How do you feel about spending to stimulate the economy? Have your spending habits changed since the downturn? For more frugal ideas, please visit Being Frugal.
Brea's Mommy
My spending has not changed, but it needs too I spend too much. I guess I can say I am trying to help the economy. LOL. I think that the main thing is for people to spend within their means and don't get in over your head. If you can afford to buy a car then now is an excellent time to do it not only for the economy, but also because there are some great deals out there. On the other hand if you can't afford it or your job is on shaky terms then I wouldn't think of buying a car to much risk of losing it and probably much more.
Corrie at "Cents"able Momma
Exactly...if you're in the market for a new car, then now is a great time to buy one - because of the great deals and the sales tax deduction.
But, if you weren't even thinking about a new car, I can't imagine buying one just to stimulate the economy :-).
Buffie
Spending money you don't have will not help the economy in the long run. I think that everyone should be concentrating more on living within their means and the economy will eventually readjust itself.
Tia @ TiaSavingCents
I definitely do not think you should go out and make an unplanned large purchase just to stimulate the economy but I HOPE the people they are trying to reach with those commercials are people who were planning to purchase a new vehicle and are now too scared even though they have not seen a life change.
It is a delicate balance -- stabilizing and maintaining a stable economy -- and keeping people fiscally responsible and I think the later is what will make the first happen, not more debt accumulation.
We have planned to make a car purchase to replace my husbands little Toyota truck for 3 years now. The truck is just shy of 300k miles and our mechanic doesn't expect it to be able to take the 100 mile (literally over the mountain and thru the woods lol) commute my husband makes to work everyday much longer without needing everything replaced. We are going back and forth. We have the cash -- he needs a reliable vehicle -- but my unemployment still makes us pause.
Great points Corrie! This is definitely a conversation that needs to be had.