Author Topic: Real World Economics  (Read 8592 times)

egamma

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Re: Real World Economics
« Topic Start: September 15, 2011, 03:22:57 AM »
Therefore, by saving, we are helping the economy just the same as we are by consuming, as we help promote investment. The problem with saving is that governments only have issues with it when the economy slows down and consumption drops, as the consumption-based market fails. The problems that arise from this are not because consumption-based markets are better in every way, but rather because the transition between a consumption-based market and a savings-based market requires radical mutations, and a lot of people are going to hurt during the transition phase. It's the same with any major economical mutation, just think of how bad the ex-USSR had it when transitioning to a market-based economy. Some countries are still not over with the problems.

Saving does nothing to increase GDP. It decreases the cost of capital, nothing more.