Topic: | Economics lesson for Edward | |
Posted by: | Thomas Barry | |
Date/Time: | 26/04/12 18:52:00 |
"save, save and save ..." Quick request - could you go and look up 'Paradox of thrift' then come back with your thoughts? [for the impatient: individual saving is good, if everyone saves at the same time (which is *what's actually happening*, by the way, it's very bad indeed] Also if people save the money has to go somewhere, and where it goes is into demand for government debt (I do hope no one is still clinging to the old Thatcher canard about the nation being just a big household - it isn't). That's the real reason interest rates on debt are low, there's massive demand for it because of the lack of other investment opportunities due to the contraction in household demand. Simple really. |