Why is an economic depression bad for consumers even though prices are cheaper?

Question

Why is an economic depression bad for consumers even though prices are cheaper?

In: 88

Answer 1

It’s not the price decrease that is bad for consumers.

Price decrease means lower profit for company.
Lower company profit translates to layoffs of employees.
Ceasing to be an employee dramatically reduces your available funds.
When you don’t have available funds, you become a very poor consumer.

In addition a sense that the depression could extend causes both consumers and companies to cut back spending which exacerbates the above. In a depression, consumer confidence is harder to bolster than it is to shake, but the only way out is to get more money flowing again.