http://www.thefreemanonline.org/anything-peaceful/oh-so-now-savings-is-bad/ Ideas on Liberty Wed, 15 Feb 2012 02:51:35 +0000 hourly 1 http://wordpress.org/?v=3.3 http://www.thefreemanonline.org/anything-peaceful/oh-so-now-savings-is-bad/comment-page-1/#comment-21431 Bill Green Tue, 18 Nov 2008 19:50:26 +0000 http://www.feeblog.org/uncategorized/oh-so-now-savings-is-bad/#comment-21431 It seems obvious that saving is not bad for the economy, but I have been bothered by something about Keynes:Let's say that people start hoarding money (not saving), according to Keynes logic, then the the feedback loop of lower consumption-lower employment-lower consumption-lower employment would cause employment to drop to zero in a finite period of time. It seems clear that this does not happen, though people do hoard money (through buying gold, for example). That means that something is fundamentally wrong with Kynes logic about the feedback loop, but I can't figure out where the problem lies.I tried imagining the employment level going to zero. In such a case, the economy would presumably be rebuilt from scratch as individuals began to trade again and innovate, etc. Then I wondered why this could not happen in teh midst of the decline. But it's still not clear to me.Any input would be more than welcome. It seems obvious that saving is not bad for the economy, but I have been bothered by something about Keynes:Let’s say that people start hoarding money (not saving), according to Keynes logic, then the the feedback loop of lower consumption-lower employment-lower consumption-lower employment would cause employment to drop to zero in a finite period of time. It seems clear that this does not happen, though people do hoard money (through buying gold, for example). That means that something is fundamentally wrong with Kynes logic about the feedback loop, but I can’t figure out where the problem lies.I tried imagining the employment level going to zero. In such a case, the economy would presumably be rebuilt from scratch as individuals began to trade again and innovate, etc. Then I wondered why this could not happen in teh midst of the decline. But it’s still not clear to me.Any input would be more than welcome.

]]> http://www.thefreemanonline.org/anything-peaceful/oh-so-now-savings-is-bad/comment-page-1/#comment-21430 Jim Davidson Fri, 14 Nov 2008 10:21:59 +0000 http://www.feeblog.org/uncategorized/oh-so-now-savings-is-bad/#comment-21430 Keynes is dead. It is clearly some sort of ghoul of Keynes that has returned and now walks the Earth. Let's do some research and find a way to drive a stake through this creature's heart, for the last time! Keynes is dead. It is clearly some sort of ghoul of Keynes that has returned and now walks the Earth. Let’s do some research and find a way to drive a stake through this creature’s heart, for the last time!

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