Wednesday, February 18, 2009

Economic Turndown - Good Aspect?

One of the comments from economists concerning the economy is that it may continue to get worse. The absolute worst thing is if consumers start to SAVE. Isn't this interesting? In an era where we (as a nation) spend more than we make and rampant loans are now failing, the message is that we need to spend out way out of the recession. Wouldn't it be much more useful in the long run to encourage saving by supporting higher saving interest rates. Similar to JoAnna's previous post, there are such contradicting messages. One is that we should save as much as we can for retirement. One says spend more to "do you part in society". One says we should save at least 10% of our salary. One says now is the time to buy large items and finance them with low interest rates (like a house). So many messages that blatantly contradict each other. No wonder people are confused.
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2 comments:

  1. ChrisFebruary 19, 2009 at 4:44 PM

    They are talking about the movement of cash, how each person spending money on services keeps others at work. That does not have to be contradictory to healthy saving. But here's the catch: are the services we are paying for supporting local jobs or chinese jobs (with its associated lack of human rights and environmental health)?

    I am a big proponent of voting with your spending choices.

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  2. JoAnnaFebruary 21, 2009 at 12:25 PM

    The other thing I keep hearing about in my limited access to news is people thinking of "novel" ways to save money that sound suspiciously like things environmentally-conscious people have been suggesting for eons. Like cutting back on worthless consumerist crap and spending more time doing things. Maybe only having 2 or 3 TVs instead of 5. Turning down the heat during the day if the house is empty. Crazy stuff like that.

    It actually drives me bonkers to hear these things because it seems like folks are willing to slum it for a little while but really can't wait to go back to the times of overloaded consumption. They don't seem to associate their actions to the larger picture.

    And I will admit to being cranky about trying to be responsible while everyone else is using up shared resources.

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