Getting stumped is sometimes an invitation to rethink what we know.
Why Does History Repeat Itself ?
Why don’t Americans save some of their money? The Federal Reserve sets interest rates between banks and for what banks charge for their services. Also what they pay savings account customers. The Federal Reserve has spent over 20 years trying to keep interest rates near zero. Good for economic growth but very bad for the small investor, it is actually like putting a tax on lower income people. The little guy gets next to nothing from his money sitting in the bank. So why save? That question no doubt has been taken very seriously by many of the people in United States.
People happily keep buying everything, mostly on credit, to keep the economy moving, this makes the economists very happy indeed. There has been a study made that shows 47% of American households don’t save any money. This will bring about sad, bad consequences in case of an economic slow down, lost jobs or many other reasons. It could leave millions with nothing to live on, or for retirement. Will welfare help them all?
The big banks, the credit card businesses, the Federal Reserve and many economists have designed this economy of ours to operate just like it’s been going for over 20 years. Live for today, don’t worry about tomorrow. The American people, on their own, are starting to wake up to the fact that tomorrow is going to come after all! Why be in debt? They’re gonna quit spending money like drunken sailors. People will stay home, keep their wallets closed and quit buying everything in sight. The economy will come to a screeching halt, quite rapidly. There will have to be a lot of new jobs developed as well as bringing jobs back from overseas.
The toughest question, when will it all hit the fan? Will this all start to happen while the Tea Party Politicians are starting dozens of new severe, austerity programs? They feel a mandate to cut government spending on people, then environment, pollution etc..
In the recent past, our forward economic progress has been phony, mostly on credit. The loss of that forward progress will be real, and painful. A new factory could start turning out bootstraps 24/7. Everybody in the country is going to have to start pulling themselves up by their bootstraps so we better make sure we have plenty on hand.