Why is an economic depression bad for consumers even though prices are cheaper?
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In conjunction with others have said, during a recesion, people are afraid to spend what money they do have which exacerbates the business loss cycle.
The very word recession is describing the strength of an economy, which itself is defined by the willingness of a population to spend money. When a population is willing to spend money its because they have all their needs met, they’re not afraid of the future, and they have excess cash to acquire their luxury desires.
A recession means that the willingness to spend money has literally receded, ie the basic needs are not being met or afraid of not being met, they’re worried for what’s next going to come around the corner, and they don’t have the money for non-essentials.
Most businesses, ESPECIALLY in a tertiary economy like the USA, are in fact not selling essential goods and services which means the majority of the employment sector is hit when people don’t want to spend money on the luxuries which make up so much the american economy, and thus we’re particularly hard hit by recession.
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