New threat to the economy: Americans are saving like it's the 1980s
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Re: New threat to the economy: Americans are saving like it's the 1980s
#2Profligate spending has been good for the consumption based economy, and bad for the vast majority of Americans who lack rainy day savings. Let alone something more serious.
If self-reliance and personal fiscal responsibility is a "threat to the economy" then the economy is part of the problem.
Re: New threat to the economy: Americans are saving like it's the 1980s
#3Even with the macroeconomic effects as valid the mode of thinking is so painfully backwards and entitled in so many ways.
1. The job of the producers is to produce what the consumers want, not the consumers to accept whatever they want to produce! It is not a birthright to guaranteed profit from whatever they want to produce being sold. That has never existed. It brings to mind every idiot CEo of a business which failed to adapt bemoaning "murder by millenials" and wondering why they aren't getting new customers among those they insulted for products they don't even want in the first place.
2. If credit flow is required for the economic velocity it hints at an insufficient amount of solid currency in the economy and the interest costs are deterring spending exactly as intended. Even if taken for granted that the boost is needed doesn't mean that a consumer credit bubble is the best way to do so.
2a. If saving is not desired behavior retirement must be guaranteed in spite of lack of it. Asking for changes with no viable alternative is a fundamentally an unreasonable demand in negotiation. If you don't want a population explosion as 8 kids is the accessible way to be supported in old age then provide elder's pensions or stop complaining about population growth.
2b. Even if they could keep on using credit until they die the gains would be unrealized as the music stops even after they claimed the estate the debt would be written off. Continually rising consumer debts are a bubble because they are not immortal conglomerate entities like corporations or governments.
3. A drop in demand given available means of payment or credit implies a failure to at the same provide utility and provide a pathway to payment.
Essentially the answer to the economic problem isn't more consumer debt and pretending this fine but solving the root problems in a profitable way.
Re: New threat to the economy: Americans are saving like it's the 1980s
#4Profligate spending has been good for the consumption based economy, and bad for the vast majority of Americans who lack rainy day savings. Let alone something more serious. If self-reliance and personal fiscal responsibility is a "threat to the economy" then the economy is part of the problem.
We've gotten efficient enough of producing the basics that we don't need everyone or maybe even half of the available labor market to do it.
That means either a good chunk of people have to be employed doing stuff driven by unnecessary spending, or they don't have employment. And we aren't great at distributing necessities to those who don't have employment.
You could say the economy is part of the problem.
Or you could just say demand drives employment, which means when demand for non-necessities drops, so does employment.
Re: New threat to the economy: Americans are saving like it's the 1980s
#5Even with the macroeconomic effects as valid the mode of thinking is so painfully backwards and entitled in so many ways. 1. The job of the producers is to produce what the consumers want, not the consumers to accept whatever they want to produce! It is not a birthright to guaranteed profit from whatever they want to produce being sold. That has never existed. It brings to mind every idiot CEo of a business which fai…
Good analysis. Relying on credit to enable consumer spending happened in the mid 1920s as stagnant wages, and income inequality reduced the discretionary budget of most consumers. At best spending on credit is a temporary boost to the economy as consumers will eventually be tapped out and spending will stop.
I agree with you, consumer debt isn't the solution, more affluent consumers is the solution. Raise wages, sell better products. Its like Henry Ford said when he gave a very large and controversial raise, your employees should be able to afford your products, if they can't, you might not have a market. As leaders of companies, we should return to the value system of generosity because that will actually support more market activity.
Re: New threat to the economy: Americans are saving like it's the 1980s
#6As bad as it is, I feel like this is our chance to do some large scale norm changes. Eg. Shorter standard work week, more time off. No as some liberal/socialist agenda but as a way to reach full employment again. I don’t think we’re ready for basic income, but whatever the right stepping stone is, I think govt has a big enough reason to address it now.
Edit: our/we = US, habit and context of article
Re: New threat to the economy: Americans are saving like it's the 1980s
#7Wow they criticise you when you spend and now they criticise you when you save.
Re: New threat to the economy: Americans are saving like it's the 1980s
#8As bad as it is, I feel like this is our chance to do some large scale norm changes. Eg. Shorter standard work week, more time off. No as some liberal/socialist agenda but as a way to reach full employment again. I don’t think we’re ready for basic income, but whatever the right stepping stone is, I think govt has a big enough reason to address it now. Edit: our/we = US, habit and context of article
Another thing is to stop tying healthcare to employment via tax benefits for employers.
So many people are stuck in less than ideal jobs because the employer-provided healthcare system is nuts. On top of that many of these plans aren't even that great any more.
Re: New threat to the economy: Americans are saving like it's the 1980s
#9[deleted]
Re: New threat to the economy: Americans are saving like it's the 1980s
#10So stim everyone again. That's just a tax on the entire population that will give the poorest some spending power. Stim everyone really hard. Consumer-level QE, HM, whatever. Apply stim to forehead.