Monday, March 16, 2009
Ideologues tell you to save, then allow your savings to collapse
LAST YEAR THE AMERICAN PUBLIC LOST AN UNPRECEDENTED, $11 TRILLION IN SAVINGS!
How often do we hear ideologues (mostly on the conservative right) tell us that we have to save more as a nation? How many times do we have to hear Larry Kudlow and other infamous “supply-side” propagandists lecture us that we must “incentivize” savings via policy?
There have been two major policies designed to get us to save: government subsidy of home ownership (largest saving vehicle of most households) and tax policy favorable to stock market investing (second biggest asset holding).
In 2008 households lost more than $11 trillion in net worth mostly because those assets collapsed.
And what did those same ideologues have to say?
They scolded us for buying homes. They said let asset prices fall; that the market would sort it all out. They deployed trillions to try to get us to borrow more. And, yes, they told us to save!