The more you undermine people’s sense of economic security during old age or tough times the more they will save. To save is to postpone current (discretionary and other) spending in anticipation of needing this cash at some future point in time in order to meet that period’s necessary expenses. CONSUMERS WILL CUT CURRENT CONSUMPTION IN FAVOR OF BEING SURE THEY CAN CONSUME IN THE FUTURE.

Cuts to social security, medicare/caid and other safety nets, as well as further monopolization will compound our current problem with a failure in aggregate demand. We have no hope of seeing an economic or job recovery until the Government starts making sound economic decisions.

It may or may not be a coincidence but undermining peoples sense of security with tough times will increase their rate of saving AT THE BANK. Bank deposits will increase and this can fuel speculate investment in foreign emerging markets.

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claywoman's picture
claywoman 8 years 12 weeks ago
#1

The upper middle class might increase deposits, but many people can't scrape together enough for the minimum deposit to open an account. Last I checked, some banks demand $200, which is more than a lot of people can save up. They have too much month left at the end of their money.

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