Saturday, April 11, 2015

Excessive savings and cluelessness

Below, the opening lines from a post titled Excessive savings[!] and Keynesian economics by Steve Kates.

See if you can find an argument in the excerpt.

Excessive savings[!] and Keynesian economics

Posted on 7:38 pm, December 29, 2014 by Steve Kates

There was a comment on my previous post, Krugman’s Keynesian cluelessness reaches new heights, that got me to thinking. Here is the comment put up by Rich, for which I am very grateful:

I was looking up the “broken window fallacy” in comments at the link that Steve Kates provided about Skousen’s Gross Output… the words that were a howler to me was the concept of “excessive savings.”

Excessive savings!

Insane, right? Who could believe such idiocy that our central economic problem is too much saving? Completely ridiculous and beyond bizarre. Utter nonsense! How stupid would you have to be to believe such stuff!


Anonymous said...

And then, those who are full of savings, talk about the perversion of too much debt,without recognizing that their success is other`s loss (increasing of debt).



The Arthurian said...

Well said, Iñigo.

Greg said...

@Inigo (Im stupid and cant get my computer to accent your "n" properly.... I apologize)

I have always been baffled by those who claim that as well. It is way too common to see someone of success berating those in debt, claiming it is their own fault that they borrowed for the car or borrowed for whatever it is they cant pay back now as if they never should have done that.

I have many a times asked them "Okay lets go back 3-5 years and lets see what today would look like if they hadn't spent all that money then. How would our retirement account portfolios look if those companies we own stock in had not made those sales to these people? What would their future expectations had been then if sales were down by 10-15% or even 5-10%? What investments would they have made then?"

This badgering of the debtors, as you reap the benefits of their personal "deficit spending" is a bizarre reaction. And make no mistake about it, we have all benefitted from their deficit spending, at least in GDP terms.

Im not excusing some of the wasteful/stupid spending many people have done but I certainly realize that our GDP numbers would have been much lower (and Bush/Clintons approval numbers much worse) if the debt had not been taken on in the 90s/2000s.

Our economy lives off debt either private or public,
pick your poison.