{"id":22469,"date":"2013-10-08T10:49:33","date_gmt":"2013-10-08T15:49:33","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=22469"},"modified":"2013-10-08T10:49:33","modified_gmt":"2013-10-08T15:49:33","slug":"in-defence-of-savings","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2013\/10\/08\/in-defence-of-savings\/","title":{"rendered":"In defence of savings"},"content":{"rendered":"

Keynes notoriously thought savings were bad … that a penny saved was a penny “prevented” from working its “magic” in the economy. Gregory Bresiger<\/a> explains why Keynes’ notion has become the unspoken understanding of most Americans:<\/p>\n

Our grandparents believed in the value of thrift, but many of their grandchildren don\u2019t.<\/p>\n

That\u2019s because cultural and economic values have changed dramatically over the last generations as political and media elites have convinced many Americans that saving is pass\u00e9<\/em>. So today, under the influence of Keynesian economists who champion government spending and high levels of consumption, thrift has been devalued.<\/p>\n

\u201cThe growth in wealth, so far from being dependent on the abstinence [savings] of the rich, as is commonly supposed, is more likely to be impeded by it,\u201d according to John Maynard Keynes\u2019s The General Theory of Employment, Interest and Money<\/em>.<\/p>\n

\u201cThe more virtuous we are, the more determinedly thrifty, the more obstinately orthodox in our national and personal finance, the more incomes will have to fall,\u201d he writes. \u201cSaving,\u201d Keynes wrote in his Treatise on Money<\/em>, \u201cis the act of the individual consumer and consists in the negative act of refraining from spending the whole of his current income on consumption.\u201d<\/p>\n

But saving, pace Keynes, isn\u2019t \u201cnegative.\u201d It is deferred consumption. \u201cThe great producing countries are the great consuming countries,\u201d writes Benjamin Anderson in Economics and the Public Welfare<\/em>. More importantly, high rates of savings will lead to higher productivity, which would benefit our children and grandchildren, classical and Austrian economists have explained.<\/p>\n

\u201cWe are the lucky heirs of our fathers and forefathers whose saving has accumulated the capital goods with the aid of which we are working today,\u201d wrote Ludwig von Mises in Human Action<\/em>. Saving, ultimately, is consumption, writes Detley S. Schlichter in Paper Money Collapse<\/em>. \u201cBy setting aside some resources for meeting financial consumption needs, we invest them.\u201d<\/p>\n

Nevertheless, Keynesian ideas dominate the Obama administration and mass media. Most politicians, including Republicans who often pretend to be friends of thrift and self-improvement, are tacit or overt Keynesians. That\u2019s because politicians, whether they have studied Keynes or not, generally love the idea of cheap money. Most delight in spending taxpayer dollars. They believe this is the way elections are won. <\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

Keynes notoriously thought savings were bad … that a penny saved was a penny “prevented” from working its “magic” in the economy. Gregory Bresiger explains why Keynes’ notion has become the unspoken understanding of most Americans: Our grandparents believed in the value of thrift, but many of their grandchildren don\u2019t. That\u2019s because cultural and economic […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,25,84,7],"tags":[436],"class_list":["post-22469","post","type-post","status-publish","format-standard","hentry","category-books","category-economics","category-government","category-history","tag-banking"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-5Qp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/22469","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=22469"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/22469\/revisions"}],"predecessor-version":[{"id":22470,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/22469\/revisions\/22470"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=22469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=22469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=22469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}