This is a big if hypothetical question. Surely, there would be huge changes in the dynamics of economy. I curious what some of this changes would be.How would our economy change if we became a nation of savers instead of spenders?Be careful who you listen to on this subject. A lot of economists are die-hard Keynesians and they are all going to parrot the answer: savers hurt the economy.
In reality, this is only true in certain circumstances. If we did not change our national financial policy as it exists right now and suddenly the American populace starting saving more then YES, savers would hurt the economy, but it it is perfectly possibe to craft a viable and healthy economy with a nation of savers. In fact, I believe such an economy would do far better than how ours is currently set up.
Right now the American economic policy hurts savers. Steady inflation between 5% and 12% (depending on how you calculate it) creates very little incentive to hoard money, and puts a great deal of pressure on the citizen to invest unused money in riskier higher yield investments in an attempt to beat inflation.How would our economy change if we became a nation of savers instead of spenders?Down the tube in a big way. Spending makes the world go around. Only have to look at Japan the past few years. They've been saving for years, and the country was going nowhere even before the recession.How would our economy change if we became a nation of savers instead of spenders?We spend over 75% of our GDP on consumption products that are not %26quot;needed%26quot;. While Japan, UK, and other similar economically developed countries spend in the high 50% range.
Japan has been saving roughly 17% of their GDP and it has gotten them nowhere, while America saves half the amount.
If we as a nation started saving and not spending, you would continue to us negatively impacting other nations such as China. (Countries that export products to us).
Though If we started saving we would start investing....Good luck on your English paper!The recession is here to stay!
The reason the Japanese economy is so sluggish is that everyone there saves as opposed to spends. Japan really nailed in their economic death with their %26quot;stimulus%26quot; packages in the early '90s and now guess what?!?! We're doing the same!
Despite that fancy Harvard education Obama boasts about he sure doesn't know his history with that outrageous spendulus bill which in fact had little to do with stimulating the economy but rather expanding government control. Even more alarming is this omnibus bill that just passed and Pelosi and her cronies are even talking of yet another massive bill of wasteful spending in the name of %26quot;stimulating%26quot; our economy.
The greatest danger though aren't these wasteful spending packages but rather forced unions. Why are the %26quot;big three%26quot; going out of business? Unions. Why are our schools failing our children despite more and more and more and more and more and more and more and more and more and more of our hard earned money being thrown at it? Unions. Why are groceries so overpriced in California? Unions. Unions started with good intentions but have grown into nothing more than a political machine for the Left that breeds carelessness and an attitude of self-entitlement for nothing.I would say the government deficit wouldn't be as bad because people are paying their taxes. But domestic companies would be hurt because if no one bought items the normal economy wouldn't survive.True Japan saved lots. The problem is that was then and this is now. Now world goes to crap. And all that saving is gone. And now they are up the creek without a paddle so to speak.
You need to just moderate your spending and savings. I spend all the time and still save and I don't make a lot of money either. I really find it odd how people struggle with the concept of spending and saving at the same time.Progress occurs when courageous, skillful leaders establish the vision for the future and seize the opportunity to change things for the better. To achieve new and meaningful goals or to move beyond the present circumstances, a change must take place. When people wish to improve their circumstances, they must be willing to improve themselves. There is nothing wrong with change if it is in the right direction. Leaders inspire others to adjust their sails to reach their destination. Any barriers along the journey are regarded as temporary changes in the direction to move you onward toward success.
