>Just the opposite. Less saving means
>more consumption and less negative
>impact on employment.
>
>More to the point is the timing of
>changes in fiscal and monetary policy.
>The Fed govt is poised to run budget
>surpluses, despite the fact that the
>economy has visibly slowed down, which
>is the opposite of the appropriate
>policy.
Liberals like to say there's an investment deficit; I do believe that EPI has devoted no small amount of paper to making that argument. But since, as Keynes said, investment and saving "are merely alternative names for the difference between income and consumption," then how can you say the investment rate is too low but that savings are irrelevant? Usually laments about low savings rates come packaged with austerity and upwardly redistributive policies, yes, and personal savings aren't the only kind, but don't you think a savings rate below 1% is a sign that something's wrong? Can an economy sustain itself by consuming 100% of personal income (which means lots of borrowing by the bottom 80% of the income distribution)?
Doug