Small is beautiful again ”” or at least it is becoming necessary. Thrift is reviving again, like it or not.
The deepening global recession and the mushrooming layoffs, bankruptcies, and foreclosures have generated a rising wave of austerity and frugality. A recent government report revealed that Americans have dramatically reduced their spending in the last nine months. Some business groups, in fact, are worried that the austerity phenomenon may very well tip the nation into a depression. It even has some wondering whether frugality will become the new norm.
The answer is probably not, at least not on a large scale. Historically, such periods of pinched frugality don’t last very long. Once the economy recovers, most people revert to traditional patterns of carefree consumption and cascading debt. The spendthrift pattern of the last decade will probably rebound.