April 13, 2021

“Crowding Out” The Next Big Trend In The Economy.

“Crowding Out” The Next Big Trend In The Economy.

Remember when you bought that first new car, or your first home, or perhaps began paying off your student loans for the first time? How those new monthly payments really crimped your style. The likely had a real impact on how you spent your income. Gone,...


Remember when you bought that first new car, or your first home, or perhaps began paying off your student loans for the first time? How those new monthly payments really crimped your style. The likely had a real impact on how you spent your income. Gone, perhaps, were some luxuries, like frequent meals at your favorite restaurant, or the theater or golf. Suddenly you had to budget for those items because first came that new house or car or student loan payment.

 

Well, that process of moving around the order of your monthly payments, is what economists mean when they talk about “Crowding Out.” You reduce those payments that aren't essential, as you have to prioritize those big important payments.