Saving Money is Good

Some good news for a change. Personal Income increased more than expenditures. Therefore, savings increased for the month. Consumer purchases rose 0.2 percent, Commerce Department figures showed today. Incomes climbed 0.4 percent, and the savings rate increased to the highest level in eight months.

Now, I don't fret over savings like most economists do. Without savings there can be no investment. Investments are needed to grow the economy. There is no such thing as the paradox of thrift, where consumers can save themselves into oblivion. If those savings are turned into loans for the creation of capital goods then everybody wins. As savings increase interest rates fall. If they fall far enough, people will stop saving and start consuming. That's how it's supposed to work in a free market economy. I wish we still had one.

I like good news, I'm just not convinced it will last.

It is really important if we It is really important if we are going to save our money so that when times comes that we need to spend money in an important thing we won't have difficulty in looking for money. There are some new FDIC backed small loans being offered by selected banks in a pilot program intended to help those in need of small loans. These loan opportunities aren't any more helpful than a larger loan at the bank, perhaps though they are meant to be a lot more accessible, and meant to compete with personal loan companies. Those with bad credit can nevertheless get financed at most payday loan companies. Credit checks are being ran by those banks participating in this program. It seems that these loans are not really to help those in need, but a lot more of a way to get rid of payday lenders. Submitted by Deanna on Tue, 2010/06/29 - 2:42am » reply |