Different borrowing, more saving
Could this little piggy bring the economy crashing down? I don't think so.
While it’s true that more people are relying on cash advances now, there are also a higher number of people stashing money in their savings accounts.
I will be the first to admit that when I read the headline “Why Saving is Killing the Economy,” I rolled my eyes.
Sensational saving skeptics
Call me cynical, but I just have a hard time believing that hard-working Americans stowing $20 out of their paychecks is “killing the economy.” For one thing, some would argue it was already dead.
I completely understand that consumer spending is key to supporting a thriving economy. But given the fact that more and more people need cash advances, I’d say we need not look at low- and middle-income Americans as the culprits in this “saving crisis.”
Show me the money
All that’s happening is people aren’t spending money on things they don’t need. Yes, that does mean businesses that deal in frivolity run the risk of going under. Or maybe they just need to market their frivolousness to a different market.
Will Smith is "Hollywood's Most Valuable Actor." I say: Smith, get to shopping!
What about all of the actors, athletes and big business owners who have millions, if not billions, stowed away? I think if Paris Hilton went on a major shopping spree it’d make a much bigger difference than me emptying my $100 savings account.
Keep your money
If you’ve got a few dollars tucked away as a cushion, it’s not going to save someone’s job if you spend it. Buy what you need. That’s enough. The economy did very well in the ’50s when the savings rate was between 8 and 10 percent. Right now it’s at 3.6 percent.
Economists are saying that if everyone suddenly begins saving 10 percent of their income we’ll have a real problem. Call me crazy, but going from “People are saving 3 percent of their income,” to “Prepare for the worst! Everyone is about to start saving 10 percent!” is a bit extreme.
Wrapping up
To summarize my point, I understand that consumer spending will help the economy. But it frustrates me when I read headlines that say “saving is killing the economy.” It’s just so sensationalistic — kind of like when cash advances and payday loans are referred to as “predatory lending.”
I doubt that the savings rate having gone up a couple of points is what has been killing the economy. That’s incredulous. What has been killing the economy is that Wall Street has been pushing the average American family into debt up to their eyeballs – never to get out from under the mortgage, the credit cards, the new car every two to three years, so on and so forth. Granted, personal responsibility to yourself is to keep out of those traps, but let us not kid ourselves – they built up this system of massive debt, and when people stopped paying, it collapsed, which they did because the gluttonous savages that loaned to them raised the rates higher than King Solomon could have paid. If every American were to raise their savings to ten percent and curb the instincts of instant gratification, then we’d all be a lot better off.
The economy is clearly at a very dangerous level. Obviously, people are losing their jobs left and right. Without a steady, decent income, people should be cutting back on their expenses and focus on saving money. In situations like this, you cannot allow yourself to be left behind with no extra cash, especially when an emergency financial event takes place.
On the other hand, people who do have that acceptable financial flow should not be discouraged and intimidated by the ongoing events of the economy. Spend and invest! Not only will you help the economy and a family man sustain a job, but you might just be thankful in the long run.