you’ll laugh, you’ll cry, it’ll change your life

SAVINGS

“Modern” economics seems to mostly regard savings as bad and spending as good. Issues I have with this. 1) People do not save indefinitely, they are merely buffering their cache to smooth out bad times or to concentrate the results of their labors on some major good. 2) You can only save money if you are earning it and therefor doing something of substantive value, and thus increasing general wealth. 3) People who save are spending on more useful and or valued items, helping to focus labor on the most valued commodities, and preventing waste.

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2 responses

  1. The Austrians regard this (consumption rather than saving) as ridiculous and ruinous. Their theories aren’t in vogue, however.

    February 20, 2009 at 6:33 pm

    • dailynat

      Part of my point is that obviously some consumption must occur for an economy to exist, but that savings could only serve as a very minor and temporary hesitation in consumptive spending that would ultimate help the holy grail of “stability”. Therefor complaining about savings during a slump shows Keynesians to be dogmatic and religulous, rather than considering what they are actually talking about.

      February 21, 2009 at 4:22 am

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