If all purchase only essential items,  the U S economy will collapse.

the us economy is already collapsing

Jim, do you honestly believe that?  You think our economy only functions because people spend all of their extra money (and sometimes even more than that, going into debt) on concert tickets and DVD players?

The purpose of saving money like this is so that you can spend it on the things that are important to you.  The next time you buy a car you can do it with cash and not pay a dime of interest or your vacation can be paid in full without putting any of it on your credit card.  You still buy a car or take a vacation, you just don't spend all of your spare time in a panic because you can't afford to make that monthy car payment in addition to your mortgage.  The economy won't collapse because the money will still be spent, just in a smarter way.  Besides, if everyone lived like this maybe no one would declare bankruptcy or smoke cigarettes (talk about a waste of money!) and the government would recoup the economic loss by not paying to bail out consumers or treat preventable lung cancer in so many of our citizens.

www.frugalityonedayatatime.blogspot.com

No, the economy is not collapsing. We are experiencing an economic downturn which is a perfectly normal part of the economic cycle. We had the boom and now we get the bust.  

In every downturn, there are sectors that suffer. People also suffer. It's especially painful right now given how leveraged many people let themselves become and increasing prices for essentials (gas, food).

Now the Great Depression: THAT was economic collapse.  Government policies (tax hikes, tariff hikes) at the time certainly didn't help.

The current situation in Zimbabwe (250k inflation, no food in stores, 80 percent unemployment)? Ditto.

Don't buy into the media hype about how bad things are. A silver lining always exists, though a person might have to look carefully to find it.

i do not think the US Economy is collapsing

Jim's point is a good one, although a little bit overstated.  Our economy has gone from needs-based consumption (think about the 1800s, when going into town meant buying flour, salt and Borax) to a wants-based economy.  150 years ago, people made what they needed, and although the industrial revolution and capitalism changed that by the 1950s, people still bought what was needed, and was this way more or less throughout modern history until sometime in the late 1970s/early 1980s.  This change started out small - videotapes became available for purchase used after the initial release popularity subsided while sports event tickets started a long long hike into the realm of outrageous and unreasonably priced.  Then came bottled water, gym memberships instead of outdoor excercise, cable telvision, etc, etc.  Now that everything is made in China for 1/20th of what it would cost to produce it locally, we have become a nation of hoarders.  We buy stuff to buy it now.  Ebay, craigslist & garage sales are full if stuff that has been used once, maybe.  And its not like we have the discretionary income of an oil-prince.  Now every household works 2 jobs and buys on credit to support our habit of consuming junk.  Starbuck's, $7 lunches, $20 DVDs that we watch & throw in a pile: and that's not even counting the money disposed of on children.  Once upon a time, kids came home from school & went outside and excersised on their own until dark.  Now we buy video games and when we see them all lethargic, buy a tramploine and time in a little-league team to schedule in the excercise they used to get on their own.  Our lives used to be filled with free versions of excersise & entertainment, but all that has changed.  Its going to take a very sharp and painful economic correction to set the nation's priorities straight, but we need to be consuiming based on needs and on income, not based on wants and available credit.

YOU DONT THINK THE U.S. ECONOMY ...is collapsing?? Then you must still have money in the bank or credit on your credit cards!! Because people who live paycheck to paycheck are sure convinced that its happening! The little people in this country are having a VERY hard time paying for gas and feeding their children at the same time. It always amazes me that people w/money dont see it and people w/out money can ONLY see it

Why is it so hard for people to change their habits?  Cutting back is a good thing.  We have distroyed the economy with our overspending and spending on credit. And yes, it is possible to live without the credit cards.  I do.  I don't buy anything unless I can pay cash.  I save all my $1 and change.  I managed in 1 year to be able to buy new furniture for my livng and dinning rooms.  It just take a little discipline.  I spent 4 years getting out of debt because of credit cards and refuse to get back into the credit game.  If you cut back it makes it easier to save also.

The ECONOMY is not collapsing...maybe it's your personal financies that are collapsing.  Last time I checked we were free to buy and sell what we wanted; just because these products cost more doesn't mean COLLAPSE!!  Now is the time to address that gross overspending habit that Americans have.  Time to evaluate what is truely important and what isn't.  We have become accustomed to the thinking that we "deserve" THINGS because we work hard or maybe it's the next best thing we "need" to buy.  You complain because of raising gas prices.  Last time I checked gas is half the price of Europe's.  High prices have to do with the weaking dollar and demand, this is a direct result of us, Americans and how fiscally irresponsible we are as a nation!!  

When I was a Teenager some years ago we did not have credit cards and it was very difficult to get  loans only for houses and cars. So people saved and saved to get a car and house. Otherwise we rented.

We put coats, shoes and etc on a layaway plan until it was paid ( was not charged interest) then we received the merchandise we worked so hard to pay.We saved green stamps and other stamps available to turn in for cook ware and items we NEEDED to run a houshold. We made most of our clothes and had hand me downs from friends, relatives and etc. and made use of all clothing before we threw it in the back of our closets like we do today. (as well as other items we let sit around usually buried in the garage in boxes. We have so much here in America we could share with other people and help others out and do not do it without a price tag attached.

If everyone would pay off all thier credit cards and do not use them again we would have cash flow and not have to worry about paying those fee's attached and save millions of dollars. Make out a budget every month and live on what we have and stop spending what we do not need.The economy will be better in the long run. I totally agree with guardian. My husband and I   2 years ago paid everything off except our home which is almost paid at the end of 2009 and we live better than we every did before because we live on a budget and know where our money is going and we are not owned by the banks with our credit cards and we can retire in style   Ginny