‘Credit card dieting’ latest trend in consumer frugality

http://www.vancouversun.com/business/Credit+card+dieting+latest+trend+consumer+frugality/1317960/story.html

Summary
Credit card dieting is the next big thing that is happening. With more and more people going on the new credit card dieting it can only mean people will be consuming less. With abundant of people consuming less, retail stores know that their sales will slowly drop. This article talks about how the economy is going into a recession, also talks about the cut backs on employee restaurants have to make in order to cover cost and make bare minimal profit. There are also ways people are learning how to save money during the recession. Instead of using their credit card or debit card, people are paying everything by cash. People are also using the quote “Only buy things you need, not want” as their motto to keep save up on their money.

Connections
In this chapter we learn about macroeconomics which is the area of economics that is concerned with the overall economy rather than individuals. In the article it mentions that abundant of employees got cut back on their jobs. With so many unemployed people seeking for jobs, the participation rates slowly decreases. As the participation rate decreases there will be even less consumers purchasing goods, which would slowly cause a recession which is a drop in economic activity. Since the participation rate is low, and a recession is going to happen it will only lead to demand deficient unemployment which results from lack of economic spending.

Personal Reflection
In my opinion the credit card diet is not a bad thing, it can help people save money up. The only reason people are going on this credit card diet is because prices for goods have risen, which caused consumers to consume less amount of goods. Not only has the prices has risen, many people got cut back on their jobs. I think the government should start up more jobs so that the participation rates increases again, therefore it will cause more people to purchase goods. If more people purchase goods, the prices of goods will drop and we will be out of the recession.