{"id":53291,"date":"2020-05-14T15:58:00","date_gmt":"2020-05-14T20:58:00","guid":{"rendered":"https:\/\/olduvai.ca\/?p=53291"},"modified":"2020-05-14T15:58:05","modified_gmt":"2020-05-14T20:58:05","slug":"the-biggest-economic-threat-today","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=53291","title":{"rendered":"The Biggest Economic Threat Today"},"content":{"rendered":"\n
\"The<\/figure>\n\n\n\n

The Biggest Economic Threat Today<\/a><\/h3>\n\n\n\n

Kind heaven, no! A fresh economic scourge is upon the land. Announces CNN:<\/p>\n\n\n\n

\u201cNew Threat to the Economy: Americans Are Saving Like It\u2019s the 1980s.\u201d<\/p>\n\n\n\n

Is a higher evil possible? Thus we are informed:<\/p>\n\n\n\n

Americans are slashing their spending, hoarding cash and shrinking their credit card debt as they fear their jobs could disappear during the coronavirus pandemic\u2026<\/em><\/p>

Although caution is a logical response to that uncertainty, hunkering down also poses a risk to the recovery in an economy dominated by consumer spending. A so-called V-shaped recovery can\u2019t happen if consumers are sitting on the sidelines\u2026<\/em><\/p>

The savings rate in the United States climbed from 8% in February to 13.1% in March. That was the highest savings rate since November 1981.<\/em><\/p>

The article further reminds us that consumer spending constitutes some 70% of the United States economy.<\/p><\/blockquote>\n\n\n\n

And so the old bugaboo rises from the grave yet again \u2014 the \u201cparadox of thrift.\u201d<\/p>\n\n\n\n

The Evils of Saving<\/strong><\/p>\n\n\n\n

The individual saver may be the model of prudence, of frugality, of forbearance\u2026 of thrift itself.<\/p>\n\n\n\n

But if the entire nation tied down its money?<\/p>\n\n\n\n

A savage cycle would feed and feed upon itself\u2026 until the economy is devoured to the final crumbs.<\/p>\n\n\n\n

Consumption would dwindle to near-nonexistence. GDP would collapse in a heap. Waves of bankruptcies would wash through.<\/p>\n\n\n\n

All this because the selfishness of savers. They refuse to untie their purse strings\u2026 and spend for the greater good.<\/p>\n\n\n\n

This paradox of thrift is perhaps the mother myth of economists in the Keynesian line.<\/p>\n\n\n\n

Yet no paradox exists whatsoever.<\/p>\n\n\n\n

Today we maintain \u2014 again \u2014 that saving is an unvarnished blessing, at all times, under all circumstances.<\/p>\n\n\n\n

Let us first plunge a stake through the squirming heart of another myth:<\/p>\n\n\n\n

The myth that consumer consumption constitutes 70% of the United States economy\u2026<\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

The Biggest Economic Threat Today Kind heaven, no! A fresh economic scourge is upon the land. Announces CNN: \u201cNew Threat to the Economy: Americans Are Saving Like It\u2019s the 1980s.\u201d Is a higher evil possible? Thus we are informed: Americans are slashing their spending, hoarding cash and shrinking their credit card debt as they fear […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[15378,1035,145,162,11023],"class_list":["post-53291","post","type-post","status-publish","format-standard","hentry","category-economics","tag-brian-maher","tag-cash","tag-cnn","tag-consumption","tag-daily-reckoning"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=53291"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53291\/revisions"}],"predecessor-version":[{"id":53292,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53291\/revisions\/53292"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=53291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=53291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=53291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}