3 ms·

I we had better Job security. A dignified retirement system. Perhaps a job guarantee or transition job for the unemployed, there would be little need to save. S

I we had better Job security. A dignified retirement system. Perhaps a job guarantee or transition job for the unemployed, there would be little need to save. Savings causes recessions.

matt_wulfeck 9y ago
Savings are always important because it allows you to be opportunistic with your wealth. Using it when you lose your job is one opportunity. People also use savings to start a business, buy dips, help out family members.
daxorid 9y ago
> Savings causes recessions If you save in traditional savings accounts, those become reserves against which banks can lend. If you save in money market funds, those become available in the commercial paper market for businesses to fund daily operations. If you save in sovereign debt, those become available for government programs. If you save in equities or corporate debt, those become available to employees, new projects, other shareholders, etc. The only scenario in which savings contributes to demand-driven recessions is if you literally withdraw cash and place it into your mattress.
- walshemj 9y ago
  Which is why governments bail out banks
  - jacquesm 9y ago
    No, they typically bail out banks because otherwise the government is on the hook for the shortfall anyway because of the federal insurance of the individual accountholders balances.
- bubbleRefuge 9y ago
  No that is ignorance. Their is no such thing as a loanable funds market. I have studied this in depth and ad nauseum. Banks do not lend out savings. This was true in the era of the gold standard but is no longer the case with modern fiat money. Essentially, banks create money(deposits) out of thin air based upon rules and regulations they must follow. They have reserve requirements, however, these do not impede their ability to make loans/deposits because reserves may be borrowed.

3 ms·

I we had better Job security. A dignified retirement system. Perhaps a job guarantee or transition job for the unemployed, there would be little need to save. S

by bubbleRefuge 9y ago

I we had better Job security. A dignified retirement system. Perhaps a job guarantee or transition job for the unemployed, there would be little need to save. Savings causes recessions.

matt_wulfeck 9y ago
Savings are always important because it allows you to be opportunistic with your wealth. Using it when you lose your job is one opportunity. People also use savings to start a business, buy dips, help out family members.
daxorid 9y ago
> Savings causes recessions If you save in traditional savings accounts, those become reserves against which banks can lend. If you save in money market funds, those become available in the commercial paper market for businesses to fund daily operations. If you save in sovereign debt, those become available for government programs. If you save in equities or corporate debt, those become available to employees, new projects, other shareholders, etc. The only scenario in which savings contributes to demand-driven recessions is if you literally withdraw cash and place it into your mattress.
- walshemj 9y ago
  Which is why governments bail out banks
  - jacquesm 9y ago
    No, they typically bail out banks because otherwise the government is on the hook for the shortfall anyway because of the federal insurance of the individual accountholders balances.
- bubbleRefuge 9y ago
  No that is ignorance. Their is no such thing as a loanable funds market. I have studied this in depth and ad nauseum. Banks do not lend out savings. This was true in the era of the gold standard but is no longer the case with modern fiat money. Essentially, banks create money(deposits) out of thin air based upon rules and regulations they must follow. They have reserve requirements, however, these do not impede their ability to make loans/deposits because reserves may be borrowed.