- Keynesian/Neoclassical: 10
- Chicago: 8
- Austrian: 5
- Socialism: 1
- Keynesian: 1
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What is the economic impact of saving?
In normal times, saving is not economically harmful but in a recessionary environment it can cause the economy to spiral downward.
Saving reduces consumer spending and may not be translated into investment spending because of investor pessimism. This will reduce total demand in the economy and lead to unemployment.
One way of correcting this is to expand the money supply to keep interest rates low. This will support private investment and stimulate total spending in the economy.
Fiscal and monetary managers need to implement policies that discourage hoarding and encourage current expenditure. As for saving over the life cycle of individuals, we need a social safety net that will provide for people in their older years.
The vast accumulation of wealth within select classes and families creates an economic oligarchy that shuts out those who cannot gain a foothold within the economic system.
Inheritance taxes, and taxes on dividends, are essential to a society that values equality. After all, the yield from vast bank accounts really amounts to unearned income. No society can tolerate some people living off interest while others live paycheck-to-paycheck off the meager sums offered by minimum wages.
Most of the Left is more interested in smug self-righteousness than in economics.
The debate about what to do now is conventionally framed in terms of the state versus (actually existing) markets - that is, as one set of bosses versus another. The possibility that people can organize themselves - through either genuinely free markets and/or through democratic co-operation - doesn’t arise. But it’s this spontaneous free organization that is the Marxist ideal.
"You go back a generation or two, the people who came into the commons, whether from the left of the right, the primary objective was to serve the country or serve their voters, not to make money for themselves.
What is new is that the majority of people now coming into Parliament have sought politics as a career since coming out of university… so what we see is the use of politics as a way of making huge sums of money".