A person being financially cautious to the point of not spending any money on non-necessities has limited ramifications for the broader economy. If only one person spends money in this extremely careful manner, the impact could be very minor. In the case of many people restricting their spending to only what they truly need, then major consequences could ripple throughout the local or national economy as a whole. All products and services are supposed to satisfy some need or resolve some problem, even if it is only the problem of wanting a luxury that one does not have, and even if the product or service does not actually fulfill its role well. But when large numbers of people withhold their money except for things they need to expend it on, entire businesses and industries can lose massive amounts of revenue—restaurants, theaters, and more.
Then, when these businesses or industries struggle to continue in the wake of decreased consumption, the employees are likely laid off, which makes it more difficult for them to get rehired because of woes in the rest of the industry and a smaller pool of potential employers (which might be inundated with applications from other laid off workers). As the economy further descends into instability, a larger number of people are likelier to begin holding onto money rather than spending it, which leads to and worsens all the same issues that sparked this downward spiral to begin with. Those who were more freely spending money when a smaller group saved with extreme diligence could find economic conditions deterring them from the (ultimately) luxuries they were accustomed to.
The ironic truth? Careful, successful financial management that benefits one person or household will probably have negative consequences in some way for another person or household in a society where, contrary to Biblical employment and poverty laws, the economy is needlessly engineered for some people to be oppressed in order for others to prosper. At least, it is crafted to enable some to prosper even more than they would have at the expense of others. Living in such a system is not the fault of the lower or middle class person who, without malice or greed or any degree of irrationality, sought to bolster their own financial standing by saving all money they could. It is not quite their fault, at least not primarily, that parts of the economy stand or fall based upon how much people are willing to part with for things they do not literally need for mere survival and baseline safety.
Is it wrong to save money when keeping it from circulation can have devastating effects? No, this does not follow logically, and one can hold onto one's money while having genuine concern for the displacement of workers who also need money that will be harder to come by due to the lack of spending on what is not needed to live. It is not that every industry that does not cater to direct needs like those for sustenance and shelter should never be established either. On one hand, not everyone can find a job within the industries addressing genuine needs in non-exploitative ways because they do not require that everyone work in them (there could easily be fewer jobs than prospective workers); on the other hand, this approach to society would eliminate many things that inject joy and relaxation into what is otherwise at the level of habitual outward activity a life of monotonous, perhaps suffocating dullness of labor for survival.
Obviously, even if all employers paid their workers well (not just better than the abysmal compensation at another company), it does not follow that all workers will save money or spend carefully albeit not with total restraint beyond non-necessities. All the same, many workers never received compensation that covered all of their survival and basic living expenses and left enough afterward for significant saving while still leaving room for flexible spending on non-necessary things. Economic downturns like the cycle described in this post, even when they are spurred on by someone being financially responsible or rational, only make it more challenging for those already suffering from the commonplace oppression of workers or from their own asinine consumerism and lack of self-control.
Unless there is an an economic system or set of safety nets in place that truly benefit everyone (Leviticus 19:9-10, 15, Deuteronomy 24:14-15, etc.), even saving money can have a terrible impact on the economy as a whole, putting one's own gains made by saving money at risk. Damned if you do, and damned if you don't? Well, that is how the American economy is increasingly structured to be for those who are not already wealthy enough to not be personally affected by major instability or to relocate to a more stable city, state, or country. A string of happenstance expenses could nullify years of consistent saving anyway. Sometimes, though, saving money itself sets in motion things which unfortunately deteriorate an economy at a widespread level.
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