When you use a service or acquire a product, you are a consumer. As a consumer, every one of you, should be familiar with consumption or you should be. You could say you consume a product or service in your daily life. Which brings up the question, where does the product or service come from? A product or service doesn’t magically appear out of thin air. It has to be provided by someone’s labor. Everyone of you that has a job, produces a product or service.

Do you see how there could be a problem when consumption and production become out of balance. What would happen if production would increase by more than consumption? Not by a little bit, but by a whole lot. Products would pile up. The people producing products would no longer be compensated and become idle. The self employed would have their lifestyle crumble and very likely not be able to pay back their business loans. Those working for others would be laid off. Of course the laid off would suffer the same as the self employed. Both groups will still consume services and products, only at a slower rate. This could cause a downward spiral by less products and services being used.

Government Unemployment compensation and welfare eases the severity of the downward slide and helps the balance between consumption and production to come back in balance. Recession is a milder form of downturn, where depression is a deeper downturn and affects more people. Another way to put it, depression is a shock to the economy, which takes a long time to recover, years not months.

Now let’s cover the other side where there are not enough workers or too many consumers. When this condition persists people will complain that some products are not available and there are shelves in stores that are empty where there used to be products. Some services may be harder to find than others and you could end up at the bottom of the list for services that is longer than it used to be.

Shortage of workers are not a big problem that Individual or small business have, that provide only services. A larger company whose emphasis is on selling products could have a problem finding qualified workers for it’s service department.

(1) A surge in consumption would cause a temporary imbalance between consumption and production. A graph of consumption and production would look like waves on a lake, sometimes stormy other times calm. Even when the lake looks calm there is always a ripple on the surface. Consumption and production just like the lake, never is in balance.

(2) The bigger problem is some people don't want to work and won't work. I realize “won't “ is a strong word, but is appropriate in this instance. It’s no wonder why some people don’t feel like working. With government compensation and payments higher and extended more then ever before. Basic living expenses are more then taken care of. What’s in it for me by working they say. There is no incentive to work! When taxes and other expenses are taken off they are no better off working then on government assistance. So why work.

Until the government cuts back assistance to only basic living expenses, there will be a worker shortage. As the gap between consumption and production widens, the economy will worsen.