This news bodes well for the American economy in the long run, as "domestic savings create a pool of money from which companies can borrow to invest in new plants and equipment, creating the jobs that push living standards higher over time. A growing domestic savings pool could also reduce America's need to borrow money overseas - which would make the U.S. less beholden to foreign creditors who now supply us with hundreds of billions of dollars in financing every year."
This development has consequences for the predicted (or actual, depending on your definition of the term) recession and recovery. If Americans aren't willing to go out and do what they do best (shop and eat) and instead stuff their money under the mattress, it is a signal that the American economy may be in for a longer and deeper recession than originally predicted. Furthermore, the recovery from the Great Financial Crisis of 2008 (catchy huh?!) and its ensuing recession may take longer than we thought it would. (We may be sitting here in the 3rd and 4th quarter of 2010, still awaiting the recovery to begin.)
So I say unto you America, shop, baby, shop!
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ReplyDeleteThis is very Bush-esque advice, mister. A moment of national awareness and possible unity? Go shopping! I don't know about you IPE types. (Says the theorist sulking in the corner.)
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