Consumer Spending Falls explores the drastic 40% drop in U.S. household expenditure during the Great Depression, arguing that this decline was a key driver of the economic crisis. It examines this period through consumer behavior, economic policy, and societal well-being. Uniquely, it highlights the bidirectional relationship between consumer sentiment and economic outcomes, demonstrating that consumer confidence actively shapes economic conditions. The book reveals intriguing insights, such as how fear of economic instability, coupled with inadequate government support, fueled a self-fulfilling prophecy of economic collapse. It further emphasizes how the dramatic decline in spending was not solely a consequence of unemployment but also a contributing factor to the Depression's severity.
The book adopts a multi-faceted approach, delving into the psychology of consumer confidence, the impact of government intervention, and the long-term consequences of austerity. It begins by setting the economic context of the late 1920s, emphasizing unsustainable debt levels, and then explores the unraveling of consumer confidence following bank failures and rising unemployment. Through archival research and econometric analysis, the book provides a nuanced understanding of the 1930s, particularly focusing on recession prevention. Finally, it draws parallels between historical spending patterns and modern economic challenges, offering policy recommendations for fostering consumer confidence and sustainable economic growth.
