Income from transfer payments, besides to industries with strong lobbyists, so let’s call it income from transfer payments to individuals with no savings, is not going to produce much economic activity, they have little discretionary income if any at all, and they buy necessities at the lowest price available.
Wal*Mart rolling back 8000 products is a sign of the first wave of apocalypse.
I agree - the Wally-world price rollback took even me by surprise. And no one here on FR can accuse me of wearing bobby socks and pom-poms for The Kenyan’s “recovery.”
There are people with savings out there, tho, who are seeing price declines and are snapping up bargains. I see this in housing in some areas - when the prices came down low enough, the people who had actual cash for residential real estate stepped up their buying of the better properties. The so-so and undesirable properties? Let’s just say that some areas have outdone even my ideas of economics - eg, Detroit proves that housing prices can go to zero. Not “close to” - but zero. No one wants many of those properties, period.
I’ve lived in and around “ghost towns” in the west, and it just seems like a mental leap too far for a ghost town to result from a city of more than a million people. I’ve seen ghost towns all over the west that used to have > 10K population in their boom times, and now have from a couple hundred left to no one left... (and not all of them are mining towns, either), but it still causes me to do a double-take when I look at what is happening in areas of the midwest.
That said, I’ll be one of the people with cash in my pocket buying machines and tools as the midwest manufacturing economies finish imploding. Lathes, mills and other machines that would cost 10’s of thousands new can be had for a dime or two dimes on the dollar - double their melt-down scrap price. Figure a machine that weighs 2 tons is worth, oh, $600+ in scrap steel price - sometimes you can find them for $1200 to $2000...