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FRED
07-12-06, 10:43 AM
America's savings hoax exposed (http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=mktw&guid=%7BEB09402A%2D4E13%2D4B5A%2D953F%2DA8669B9191 C0%7D)
July 12, 2006 (MarketWatch)

Politicians, bankers and CEOs all want you to spend, not save

OK, let's stop the charade and admit the truth. Why does America have a zero savings rate? Because America has no savings policy. Period. For more than a decade, Washington, Wall Street and Corporate America have favored a national spending policy at the expense of a national savings policy.

So when these policymakers tell us to "save more," they're happy-face hypocrites hiding their real goals. They really want you to spend, not save!
In pure economic terms, the choice is simple. You can't save and spend too. And especially since the 2000-02 recession, our policymakers have consistently voted in favor of spending, not saving. So read my lips: America's savings policy is a fake, bogus, phony, fraudulent, bankrupt and, oh yes, non-existent. Why? Because our policymakers don't want you to save, they want you to spend, spend no matter how deep you go into debt. Ignore their rhetoric, watch their actions.

AntiSpin: Paul Farrell has long been on our Good Guys list, and this piece cements his position as a leader among the most honorable writers for major financial press outlets. We hear complaints all the time that major media organizations are generally too helpful in supporting the collective behavioral engineering coming out of Washington, Wall Street and Corporate America that's designed to keep consumers in debt and not save. The fact is, there is a long list of writers -- including Laura Rowley, Ben Stein, Roddy Boyd -- who do a fantastic job of helping those who want help, and point out just what The System is designed to do. We salute you.

lobodelmar
07-12-06, 12:02 PM
Where is the good guys list posted? And do you have links to their blogs or websites linked as well? you underlined Good Guys but it wasn't an active link...

BK
07-12-06, 02:13 PM
Spending provides the Politicians lots of opportunities to create a steady income/revenue for Politicians to create their fiefdoms and dole out jobs.

The Best part of over spending it creates a society that is dependent on Government = more Customers for Government Services.

Consider a $100,000 sitting in Treasurys - earning 5% interest. You'll be Federal income on the $5000 - that equals $500 - $1500 - depending on your tax bracket. No state or local taxes

That same $100,000 - if it were invested in a House in New Jersey worth $500K-$600K - would result in Property Taxes of approximately $6,000 - $7,000- for the Town and County Governments. The best part is that most people welcome Property Tax - because its a great tax shelter and a great investment.

So,next time there is an over-ride vote for a good cause - "please- just say no!"

jk
07-12-06, 03:25 PM
Spending provides the Politicians lots of opportunities to create a steady income/revenue for Politicians to create their fiefdoms and dole out jobs.

The Best part of over spending it creates a society that is dependent on Government = more Customers for Government Services.

Consider a $100,000 sitting in Treasurys - earning 5% interest. You'll be Federal income on the $5000 - that equals $500 - $1500 - depending on your tax bracket. No state or local taxes

That same $100,000 - if it were invested in a House in New Jersey worth $500K-$600K - would result in Property Taxes of approximately $6,000 - $7,000- for the Town and County Governments. The best part is that most people welcome Property Tax - because its a great tax shelter and a great investment.

So,next time there is an over-ride vote for a good cause - "please- just say no!"
bk, it doesn't matter who is holding the tbills. if you don't buy them they get sold to someone else, or monetized by being sold to the fed. the 100k is just somewhere else in the system. e.g. you take 100k out of a money market fund to put down on a house. the money fund has to sell commercial paper or tbills to generate the 100k. someone buys those instruments. so the money and the tbills and the assets and liabilities get passed around, but nothing changes when viewed over the whole system.

the issue is one of savings over the whole system. you can have individuals save, corporations save or governments save what gets saved is then, ultimately, invested in some fashion.

one of our country's real problems is that so much investment has been going into housing, which is non-productive.

BK
07-12-06, 04:15 PM
JK,
MY POINT WAS that I believe giving Consumers incentives to spend leads to higher tax receipts and more dependent tax paying consumers. Increase dependency and people will never ask for cut back in government services.

I understand how T-bills function in our economy.

The Government uses Tax policy to encourage consumer spending - politicians are ONLY concerned with Tax receipts.
Every organization run by people seeks to expand it mission - and our government is no different.

No one in Government office is interested in a Nation of Savers- Is bad for business!

jk
07-12-06, 06:35 PM
i agree that any official tut-tuts about low saving is hypocritical. saving would sent this country into a terrible recession. it's like the "strong dollar" policy - wink, wink, nudge, nudge.