America's low savings rate

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Sun Aug 19 10:49:17 PDT 2001



> From lawrence at krubner.com Sun Aug 19 10:36:42 2001
>
> Don't you think the savings rate contributes
> anything to the health of the economy?

With a word like "anything" in that question, of course my answer is "yes!" (duh?) ... but what _exactly_ that "anything" is, I'm not sure. I think that people have come to associate "something" with a "high savings rate" but I don't see how a) it's transferrable to other economies ("People in Sweden save four times as much as those in the US!" -- so?) or b) you can compare "savings rate" over the last N years without somehow factoring in the shift in tax policy and the effect of the 4x increase in the stock market since 1990.

That is: I think it's disingenuous to tsk-tsk at a chart of the savings rate in the US.


> Are you suggesting that if we had a massive bear market
> people would invest more?

No, but then again, the contrapositive is often not true.

/jordan



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