One aspect of a high cost economy

My car needs an oil change every 3500 miles. The oil service station always puts a tag for oil change at 3000 miles. I drive around 18000 miles/ year. If I follow the 3000 mile routine, I need one additional gas change - an additional $40 per-year. Assuming that there are 100 million cars in the US, and there is an additional $40 million expense being incurred on them, which is avoidable, as a country the US incurs $4bn extra on car oil change alone.

To be able to afford this additional $4bn, individuals collectively have to earn an additional $4bn. This effectively pushes up the average salaries that all the people will be willing to accept on the average.

Now spread this phenomenon to all other areas of our economy and you will see that a number of such expenses - which do not necessarily contribute to "a good life" consume a significant part of the earnings in the economy, which effectively puts the fixed cost of the economy to a much higher level than is needed.

The other side of this story is that the additional expenses create additional jobs for others, which then sustains the demand in the economy. Maybe the additional job creation outweighs the jobs lost because of high fixed costs. We will know for sure someday.