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>Yes, savings are "intrinsically less moral" as savings are money not being used. Incorrect. Savings (i.e. bank deposits, financial instruments of various degr

>Yes, savings are "intrinsically less moral" as savings are money not being used. Incorrect. Savings (i.e. bank deposits, financial instruments of various degrees of risk, from GICs to junk bonds) are very much being used, they are lent to other entities. Few people "save" by stuffing pieces of paper or gold coins under a mattress. >And since wealth accumulates itself the more savings the more income inequality. The logical error here is to think of savers and borrowers as permanent classes. In fact most people's life trajectory starts out as them borrowing more (for education, house, etc) and gradually transitions into them saving more (for retirement, inheritance). You need a healthy mix of borrowers and savers in a healthy economy. They help each other by participating on the opposite ends of a transaction from which they both benefit (i.e. not zero sum). And, as an aside, wealth/income inequality is not somehow intrinsically negative, like for example poverty would be. Poor or middle-class people in a rich but very unequal society may very well be much better off than poor or middle-class people in a poor but more equal one. >It is intrinsically immoral that the wealth controlled by two dozen Western families is larger than the wealth of three billion people. It is not. Let's say there's a policy which raises the standard of living (or amount of wealth) of the bottom 3 billion people by 1.2x, but raises the amount of wealth of the top two dozen dastardly Western families by 1.3x. This increases wealth inequality, and yet it is intrinsically moral to pursue this policy.

bjourne 4y ago
> Incorrect. Why did you ask the question if you thought you already knew the answer? By definition, savings are being saved. Investments are being invested. If you think that savings and investments are synonymous then you are wrong. According to https://www.marketwatch.com/picks/heres-exactly-how-much-americans-have-in-savings-at-every-age-and-yikes-heres-what-they-should-have-01659384531 https://www.marketwatch.com/picks/heres-exactly-how-much-ame... the median American has accumulated a measly $6,400 in their decade before retirement. Money they will then need to use when they are retired and without income. And that is in one of the richest countries in the world. So it is correct to talk about borrowers and savers as permanent classes. Right now, profits are record high while real salaries are shrinking due to inflation (i.e. due to massively raised prices). You have to be a fool not to be able to connect the dots.
- kspacewalk2 4y ago
  >Why did you ask the question if you thought you already knew the answer? "Incorrect" referred to "savings are money not being used", i.e. the rationale for your answer, not your answer itself. >If you think that savings and investments are synonymous then you are wrong. You just need to think it through a few more steps. For example, what do banks do? They take your savings and invest them. Bottom line is, savings are absolutely, definitely, and crucially not "money not being used". >the median American has accumulated a measly $6,400 in their decade before retirement. No, that's not what the number is. The number is savings, but excluding retirement funds. So if I put money into my Roth IRA or 401k, it's not counted, even though that can be just money sitting in a bank account or a GIC, i.e. very straightforward savings. >Right now, profits are record high while real salaries are shrinking due to inflation (i.e. due to massively raised prices). Yes, we have a big problem with inflation, and the Fed (and other central banks) are addressing it.
  - bjourne 4y ago
    Read the sibling's comment because this is incorrect: > Bottom line is, savings are absolutely, definitely, and crucially not "money not being used". By definition, "savings" are not being used. Had they been used trickle-down economics would have been an awesome policy. You'd just put more money on rich peoples' bank accounts and the money would magically reappear in someone else's pockets! The median American retirement fund is about $90,000. Regardless how you count that is not a lot.
throw0101c 4y ago
> Incorrect. Savings (i.e. bank deposits, financial instruments of various degrees of risk, from GICs to junk bonds) are very much being used, they are lent to other entities. No, they are not lent to other entities. When a bank creates credit/load, they simply type something into a computer and the entity gets a credit in their account. The lending of savings and bank reserves and the multiplier has not been a thing for decades. Tobin called this the "Old View" in 1963: * https://elischolar.library.yale.edu/cowles-discussion-paper-series/388/ https://elischolar.library.yale.edu/cowles-discussion-paper-... * https://www.pragcap.com/r-i-p-the-money-multiplier/ https://www.pragcap.com/r-i-p-the-money-multiplier/ For the modern world see: * https://www.bankofengland.co.uk/explainers/how-is-money-created https://www.bankofengland.co.uk/explainers/how-is-money-crea... * https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m... * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625

bjourne 4y ago

> Incorrect. Why did you ask the question if you thought you already knew the answer? By definition, savings are being saved. Investments are being invested. If you think that savings and investments are synonymous then you are wrong. According to https://www.marketwatch.com/picks/heres-exactly-how-much-americans-have-in-savings-at-every-age-and-yikes-heres-what-they-should-have-01659384531 https://www.marketwatch.com/picks/heres-exactly-how-much-ame... the median American has accumulated a measly $6,400 in their decade before retirement. Money they will then need to use when they are retired and without income. And that is in one of the richest countries in the world. So it is correct to talk about borrowers and savers as permanent classes. Right now, profits are record high while real salaries are shrinking due to inflation (i.e. due to massively raised prices). You have to be a fool not to be able to connect the dots.

kspacewalk2 4y ago
>Why did you ask the question if you thought you already knew the answer? "Incorrect" referred to "savings are money not being used", i.e. the rationale for your answer, not your answer itself. >If you think that savings and investments are synonymous then you are wrong. You just need to think it through a few more steps. For example, what do banks do? They take your savings and invest them. Bottom line is, savings are absolutely, definitely, and crucially not "money not being used". >the median American has accumulated a measly $6,400 in their decade before retirement. No, that's not what the number is. The number is savings, but excluding retirement funds. So if I put money into my Roth IRA or 401k, it's not counted, even though that can be just money sitting in a bank account or a GIC, i.e. very straightforward savings. >Right now, profits are record high while real salaries are shrinking due to inflation (i.e. due to massively raised prices). Yes, we have a big problem with inflation, and the Fed (and other central banks) are addressing it.
- bjourne 4y ago
  Read the sibling's comment because this is incorrect: > Bottom line is, savings are absolutely, definitely, and crucially not "money not being used". By definition, "savings" are not being used. Had they been used trickle-down economics would have been an awesome policy. You'd just put more money on rich peoples' bank accounts and the money would magically reappear in someone else's pockets! The median American retirement fund is about $90,000. Regardless how you count that is not a lot.

throw0101c 4y ago

> Incorrect. Savings (i.e. bank deposits, financial instruments of various degrees of risk, from GICs to junk bonds) are very much being used, they are lent to other entities. No, they are not lent to other entities. When a bank creates credit/load, they simply type something into a computer and the entity gets a credit in their account. The lending of savings and bank reserves and the multiplier has not been a thing for decades. Tobin called this the "Old View" in 1963: * https://elischolar.library.yale.edu/cowles-discussion-paper-series/388/ https://elischolar.library.yale.edu/cowles-discussion-paper-... * https://www.pragcap.com/r-i-p-the-money-multiplier/ https://www.pragcap.com/r-i-p-the-money-multiplier/ For the modern world see: * https://www.bankofengland.co.uk/explainers/how-is-money-created https://www.bankofengland.co.uk/explainers/how-is-money-crea... * https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m... * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625