This page has been archived and commenting is disabled.

Keynesian Knightmare: US Savers Outnumber Spenders By Record Numbers

Tyler Durden's picture




 

"Janet, we have a problem," is the resoundingly loud message from the latest Gallup poll of Americans preference (and relative enjoyment) of "saving" vs. "spending". It seems, despite all the hoop-la and exuberance about an 'economic recovery' that is pent-up due to weather but about to break out to escape velocity, the majority of Americans continue to enjoy saving money more than spending it, by 62% to 34%. The 2014 saving-spending gap is the one of the widest since Gallup began tracking Americans' preferences in 2001. How long before a discussion of negative rates re-appears as the rich and powerful Oz-ians contemplate the latest effort to 'change' people's mass psychology...

 

 

As Gallup concludes, while this question does not measure actual spending or saving, it provides important insight into the psychology of the American consumer's approach to money.

At this point, the trend suggests that Americans have shifted their mindset significantly more toward the view that saving is the more enjoyable behavior, not spending.

Reality 1 - 0 Fed/Keynes

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 04/21/2014 - 13:35 | 4680058 NDXTrader
NDXTrader's picture

What a worthless poll. Of course, most people would like to be a "saver". But what they say and what they do are entirely different things. They may as well have asked "Would you rather be handsome or not handsome?"

Mon, 04/21/2014 - 13:37 | 4680074 Osmium
Osmium's picture

I have to agree.  Seems to be a large portion of the population just scraping by.  Not sure how they would have anything left over to save?

Mon, 04/21/2014 - 13:38 | 4680075 i_call_you_my_base
i_call_you_my_base's picture

They are referring to their coin jars.

Mon, 04/21/2014 - 13:46 | 4680104 Shocker
Shocker's picture

People are making less, so they don't feel like they can spend like that used it.

They are just getting by with what they have.

Job Situation: http://www.dailyjobcuts.com

-

Mon, 04/21/2014 - 13:49 | 4680124 quintago
quintago's picture

Are they running out of shit to buy?

Mon, 04/21/2014 - 14:03 | 4680167 dontgoforit
dontgoforit's picture

Well, sort of.  The missus and I were talking about this just yesterday.  We have everything we want.  We are making a lot less money, but only the last one in college (finishes next month) and the grand kids keep us buying anything at all except for presents.  Yes; we are very thankful for our blessings, but yeah, we both went to school and worked our butts off to get to this point.  Retirement is 3 years away at 67.  We're ready. 

So, yeah - not spending as much because we don't really need anything.  It's a good place to be.

Mon, 04/21/2014 - 14:41 | 4680304 daxtonbrown
daxtonbrown's picture

I am a serial entrepreneur. Some successes, lot of smaller failures, over all did better than ok.
Still have three startups going. I ain't spending shit. I will hire no one because of Obamacare. Robotizing everything I can. I am literally using dirt for some production.
I suspect most people are doing some variation of the same, downsizing expenses, saving for inevitable disaster, jumping off the musical chairs. Fuck the bureaucrats, politicians and bankers. Homey don't play that game no more.

Mon, 04/21/2014 - 19:41 | 4681163 Theosebes Goodfellow
Theosebes Goodfellow's picture

~"I suspect most people are doing some variation of the same..."~

I'm saving all I can, truth be told. But like a lot of ZHers, I have the damnest luck with boats and whatever PMs I buy. You'd figure I'd learn, but nope, the shit just keeps either falling overboard or simply going down every time these watercraft pops a leak.

Seriously, I have a dandy project sitting in the wings, but I'll be damned if I'm going to start it with the way the Rule of Law has taken a shit. I can wait. And in November, I can vote.

Mon, 04/21/2014 - 14:04 | 4680174 asteroids
asteroids's picture

No, they are turning more Japanese. Amerika is going down the road the Japanese have followed. Nothing can defeat demographics. Not even the FED.

Mon, 04/21/2014 - 16:21 | 4680628 mickeyman
mickeyman's picture

Time for negative nominal interest rates

Mon, 04/21/2014 - 15:27 | 4680477 mrdenis
mrdenis's picture

I'm wrapping pennies

Mon, 04/21/2014 - 16:22 | 4680630 mickeyman
mickeyman's picture

Or they could force you to keep the coins in your home if you're a saver and make the coinage out of radioactive materials!

Mon, 04/21/2014 - 14:30 | 4680253 alangreedspank
alangreedspank's picture

If they got rid of the McMansion and the extra (new) car in the driveway, they could save.

Mon, 04/21/2014 - 14:43 | 4680315 post turtle saver
post turtle saver's picture

sorry moron who downvoted this, but alangreedspank is absolutely correct... there's owning a place to live and driving a reasonable car, then there's McMansions and spinners and other "house poor / hood rich" types

Mon, 04/21/2014 - 15:03 | 4680392 headhunt
headhunt's picture

and if the government would do something crazy like cut back on their budgets - like most Americans do to pay the ever increasing taxes - to pay the ever increasing budgets.

Mon, 04/21/2014 - 17:21 | 4680814 Monty Burns
Monty Burns's picture

It's counter-intuitive I know but savings actually do go up during recessions.  Presumably it's the fear factor.

Mon, 04/21/2014 - 18:25 | 4681004 Firepower
Firepower's picture

MUST have a third data point: Credit card debt.

Don't mean squat if respondents "say" they LURV Teh Savings" and have $30,000 in the bank but put $56,000 per year on the VISA

https://eradica.wordpress.com/

Mon, 04/21/2014 - 14:11 | 4680193 NotApplicable
NotApplicable's picture

If the poll were as worthless as you posit, it would be two flat lines, one at zero, one at one hundred. Instead though, what it shows is the marginal propensity to consume vs. marginal propensity to save. Which is nothing more than a question of time-preference, which can also be stated, "how comfortable are you with your current level of savings?"

If someone feels they have plenty of savings, then they feel less satisfaction by adding a marginal dollar to savings instead of consuming it. If someone feels like they don't have enough savings, then they feel more satisfaction by increasing their savings rather than consuming it (in general that is, given every purchase has its own unique value to the purchaser).

So, this poll quite accurately displays that people do not feel comfortable consuming scarce assets in this economy. Which, of course, is a good thing (regardless of the Keynesian Cult's view), as it shows people are properly observing the direction of the future (regardless of the MSM spin), even though they may not have a clue as to why.

Mon, 04/21/2014 - 14:32 | 4680259 sessinpo
sessinpo's picture

NotApplicable   If the poll were as worthless as you posit, it would be two flat lines, one at zero, one at one hundred. Instead though, what it shows is the marginal propensity to consume vs. marginal propensity to save.

---

This is an opinion poll, not an action poll.

As money.cnn indicates, an astounding 76% of Americans are living paycheck to paycheck, thus they aren't saving. But I imagine many of those would enjoy saving more then spending if they had the disposable income.

http://money.cnn.com/2013/06/24/pf/emergency-savings/ 76% of Americans are living paycheck to paycheck

It is really a ridiculous poll.  You say "If someone feels they have plenty of savings, then they feel less satisfaction by adding a marginal dollar to savings instead of consuming it." But if they have no disposable income, they have limited choices in this matter and thus it changes the opinion poll results.

For example, if I am paycheck to paycheck and cash poor, then I would prefer savings until I feel more secure to do spending on extra things.

Mon, 04/21/2014 - 14:52 | 4680357 Catullus
Catullus's picture

Opinion polls aren't actual polls? They're not actually polling opinions?

It's pretty straight forward. Those polled said they'd prefer to save than spend by a 2:1 ratio.

Whether they actual do or can has nothing to do with it. And even more to the point, even has people's incomes have been declining on a real basis over the past decade and interest rates are the lowest in human history, the trend has been that more people respond that they prefer to save.

What it destroys is the Keynesian myth that they can manipulate interest rates to near zero to encourage spending. Or that it will engerize "animal spirits" by consumers to spend out of recession

Mon, 04/21/2014 - 16:26 | 4680647 ArkansasAngie
ArkansasAngie's picture

Personally ... damn both supply siders and "demand siders".

efficient market?

There are no free markets.

Mon, 04/21/2014 - 14:59 | 4680380 headhunt
headhunt's picture

yeah but "Would you rather be handsome or not handsome?"

Mon, 04/21/2014 - 15:26 | 4680470 DosZap
DosZap's picture

http://www.latimes.com/business/la-fi-adults-in-parents-home-20140421,0,2293806.story#ixzz2zXcacB4r

 

Yeah, this is the NEW economic BOOM!!!!!!!!.With results lke this, I hope it doesn't get  MUCH better!.

Mon, 04/21/2014 - 16:17 | 4680616 czardas
czardas's picture

NDXT Trader,  More to the point, no amount is asked.  Are they saving $10/mth, $25/mth or $200/mth?  Are they saving for retirement or to buy a goody because their cards are maxed?  Another feel good poll.   If folks were saving there would not be a retirement crisis. 

Mon, 04/21/2014 - 17:11 | 4680740 JuliaS
JuliaS's picture

In a fiat economy there are 2 directions:

Inflation - prices growing faster than wages.

Deflation - wages falling faster than prices.

Casino always wins.

Savers don't scare the Fed. The bank can dilute money right out of your pocket. It's beneficial to them that you produce goods supply services and carry redemption well into the future. That way they can consume today and leave you empty-handed tomorrow. IOFU.

With a fiat-controlling central bank it is impossible for them to be at a disadvantage.

You save (meaning you produce but don't consume equally) - they'll rob your term deposits, pension funds and social security in order to consume on your behalf.

You go into debt (meaning you consume in excess of production, but plan to make up for it later) - they burden you with interest, demanding you do twice the work later for evey unit of consumption.

You borrow and default strategically (you consume never planning to produce) - the economy takes a hit, and they print more money to get it going again. They dilute money out of everyone's pocket to plug up the hole in yours and since all of that fiat comes into existence as same good'ole debt issued to government, then everybody is forced to work twice for every unit of your consumption.

Meanwhile they skim off the top regardless of the market direction.

There is only one Keynesian nightmare. It's called "Barter", but thanks to the cleverly crafted IRS code, you're required to produce fiat denominated taxes even on transactions never involving fiat. Supposedly the Fed charges us a fee for "renting" the dollars and that argument should go out the window when dealing with barter... but... they've got guns. And when they've got guns, they may tax you because your hair is brown and it's Tuesday for all we know. Doesn't really matter what excuses they make. Guns speak louder than words and we're a nation of cowards. It's as simple as that.

Mon, 04/21/2014 - 13:35 | 4680059 i_call_you_my_base
i_call_you_my_base's picture

That's why you have to give rich people more money. They have to spend five times as much to counteract the savers.

Mon, 04/21/2014 - 13:38 | 4680083 Mr Pink
Mr Pink's picture

Hope they aren't "saving" it in fiatscos

Mon, 04/21/2014 - 14:11 | 4680199 NotApplicable
NotApplicable's picture

For the best ROI, they bundle it up and hand it off to Corzine.

Mon, 04/21/2014 - 14:34 | 4680265 Greenskeeper_Carl
Greenskeeper_Carl's picture

im not, just a little cash, to cover a couple months bills if need be, everything else goes into gold/silver. But if I am looked at through the lens that is typically used to determine f I am a saver or not, IE how much i keep in those types of accounts, it looks as though i spend everything I have and am entirely pay check to pay check

Mon, 04/21/2014 - 13:35 | 4680062 GOSPLAN HERO
GOSPLAN HERO's picture

Eat that Chas Caldwell.

Mon, 04/21/2014 - 13:39 | 4680078 GOSPLAN HERO
GOSPLAN HERO's picture

That's "Chas fucking Caldwell" the MarketWatch troll.

Mon, 04/21/2014 - 13:36 | 4680064 FieldingMellish
FieldingMellish's picture

Don't forget, in New Normal speak... not spending or spending less (of what you don't actually have anyways) = saving

Mon, 04/21/2014 - 17:25 | 4680821 JuliaS
JuliaS's picture

Don't hoard your breath.

Mon, 04/21/2014 - 13:36 | 4680066 Apocalicious
Apocalicious's picture

This chart accurately captures the stupidity, laziness or both of the American people, since their actual behavior differs from their stated preferences by 180 degrees. 

Mon, 04/21/2014 - 13:37 | 4680067 hobopants
hobopants's picture

Saving fiat is like saving left overs, it starts to go bad after a few days.

Mon, 04/21/2014 - 13:54 | 4680146 NotApplicable
NotApplicable's picture

I'm always correcting people who mention they're "saving dollars," pointing out that it is absolutley impossible if you're talking about saving purchasing power over time.

Which of course, is why the chart above looks as it does. People would love to be able to save, if it were only possible.

Mon, 04/21/2014 - 13:37 | 4680071 agstacks
agstacks's picture

Domestic Terrorists save money. Patriotic Amerikans spend it. 

Mon, 04/21/2014 - 14:25 | 4680240 Winston of Oceania
Winston of Oceania's picture

Brewing your own beer and growing vegetables is now an act of domestic terror! -The dude with a phone and a pen

Mon, 04/21/2014 - 13:37 | 4680072 IridiumRebel
IridiumRebel's picture

We need a fucking bail in to right this atrocity.

Mon, 04/21/2014 - 13:38 | 4680080 101 years and c...
101 years and counting's picture

the fed has an answer for that:  inflation in food, energy and rent.  problem solved (for the keynes loving fuckbags).

Mon, 04/21/2014 - 13:41 | 4680091 qazwsx
qazwsx's picture

Saving with 0% interest is retarded... people must be getting desperate, gotta save to buy a pound of beef now!

Mon, 04/21/2014 - 14:13 | 4680203 NotApplicable
NotApplicable's picture

Still beats the negative interest rates we're getting now!

Mon, 04/21/2014 - 13:41 | 4680092 Seasmoke
Seasmoke's picture

Damn right I am a saver !!!!...............all my "savings" are going towards gas, electric and food

Mon, 04/21/2014 - 13:54 | 4680144 1stepcloser
1stepcloser's picture

hence ur a renter in the end!

Mon, 04/21/2014 - 13:58 | 4680159 NotApplicable
NotApplicable's picture

I save money when I pay down my Visa balance.

TADA!

Mon, 04/21/2014 - 14:22 | 4680236 Winston of Oceania
Winston of Oceania's picture

Starving banksters are we? Let me zee your paperz consumer!

Mon, 04/21/2014 - 14:37 | 4680280 sessinpo
sessinpo's picture

NotApplicable       I save money when I pay down my Visa balance.

   -----

Winston of Oceania         Starving banksters are we? Let me zee your paperz consumer!

----

NotApplicable is okay. Just having a visa puts you in the machine .. No papers neccessary. They got him/her.

Mon, 04/21/2014 - 14:56 | 4680374 headhunt
headhunt's picture

According to a friend of mine, you save money buying shit on sale and then paying down your Visa

Mon, 04/21/2014 - 14:52 | 4680356 headhunt
headhunt's picture

Damn Bush and his oil buddies.

Mon, 04/21/2014 - 13:43 | 4680100 novictim
novictim's picture

It's all roses...until you realize that the massive "savings" is by the top 0.1% of the US public.  

The bottom 96% are broke and are 1-3 paychecks away from ruin.

The fatal trend of wealth inequality is not good for anyone.  It is UNNATURAL, it is toxic to our democracy, and it will lead to both a financial disaster and if not currected, a violent revolution.

---

BTW: Blaming Keynes, the economic policy not seen since the 1960s,  on the fact that the Ultra-wealthy are taking home all the economic gains , gains that otherwise would be used for consumer spending, is like blaming a rape victim for not using a condom.

Mon, 04/21/2014 - 13:53 | 4680142 pods
pods's picture

Don't worry, once the FRN loses reserve currency status things will change.

If you aren't turned to carbon in a blinding flash you might get to enjoy the next system as it is set up.

pods

Mon, 04/21/2014 - 14:04 | 4680171 hobopants
hobopants's picture

I'm hoping for a "peaceful" implosion rather than a false flag and another war. I guess that makes me a species of optimist?

Mon, 04/21/2014 - 14:21 | 4680228 Winston of Oceania
Winston of Oceania's picture

It will likely only make you extinct, a plan you don't need saves your ass far better than no plan will even if you never use it.

Mon, 04/21/2014 - 16:25 | 4680644 czardas
czardas's picture

I've started to encounter this type (one paycheck from disaster) more and more.  What I discover is that most want the marketed $175K lifestyles on a $35K budget - largest cable package, smart phone, new car, lottery player, eat out frequently, homes and vacations they can't afford.  Not blaming marketing - just the inability of folks to stop spending when they don't have it. 

Mon, 04/21/2014 - 13:46 | 4680107 dobermangang
dobermangang's picture

These people better spend before they go bankrupt.

http://www.youtube.com/watch?v=LHFEcyUNBjg

Mon, 04/21/2014 - 13:46 | 4680108 rsnoble
rsnoble's picture

#1:  Don't stand too close to that launchpad

#2: How to increase spending:  Simple.  Raise all taxes.  Keeps the parasites employed that's all most of them care about.  Yep, as long as the cunt at the courthouse can wear a different $150 turtle neck and crotchless panties with a buttplug everyday everything is AOK with them.

Mon, 04/21/2014 - 13:51 | 4680131 Dr. Engali
Dr. Engali's picture

How is that even possible when nobody has any fucking money?

Mon, 04/21/2014 - 13:56 | 4680152 NotApplicable
NotApplicable's picture

The chart doesn't show actual savers, but rather, wannabe savers.

Mon, 04/21/2014 - 14:34 | 4680269 buzzsaw99
buzzsaw99's picture

^this^ and ^that^

Mon, 04/21/2014 - 14:47 | 4680339 headhunt
headhunt's picture

I don't know about you but I am following the lead of the Fed and have started depositing my monopoly money

Mon, 04/21/2014 - 15:30 | 4680486 Kirk2NCC1701
Kirk2NCC1701's picture

But they have "credit".  Finance now, pay off later.  ;-)

Seriously though, this means that Sales will get more Darwinistic in all fields.  Therefore... plan to be the best, plan to move up, or expect to slide down and out.

Mon, 04/21/2014 - 16:18 | 4680621 cro_maat
cro_maat's picture

I have been preaching this since 2009 and still amazed at at the sales people who don't get it. If I am not #1 or #2 in sales at my company, then I know I am on the chopping block. Headhunters hate to call me because I laugh at their offers. What good is a $25 k raise when you know you can be laid off 3 mths into the new job because you have no track record and their ship is sinking. Better to outcompete in a market you dominate and not get your feet wet when the tide comes in.

Mon, 04/21/2014 - 13:52 | 4680133 1stepcloser
1stepcloser's picture

Kenyan nightmare...Keynesian Knightmare...I'm fucking losing my mind

Mon, 04/21/2014 - 13:59 | 4680161 LawsofPhysics
LawsofPhysics's picture

What are they "spending"?  Paper and digital "credits" of increasingly diminishing "value"?

 

makes sense to me...

Mon, 04/21/2014 - 14:13 | 4680202 Rising Sun
Rising Sun's picture

Foodstamp usage is obviously included in this data.

Mon, 04/21/2014 - 14:15 | 4680210 Rehab Willie
Rehab Willie's picture

the .0001% account for 99.9999% of the savings

Mon, 04/21/2014 - 14:17 | 4680217 Warhead
Warhead's picture

"Americans prefer giving their money away slowly vs. Doing so quickly."

Mon, 04/21/2014 - 14:35 | 4680241 Smegley Wanxalot
Smegley Wanxalot's picture

if 62 people are saving $1 per month, and 34 people are borrowing $5 per month, the Yellen's panties are wet and moldy

Mon, 04/21/2014 - 14:45 | 4680328 headhunt
headhunt's picture

Gross - but appropriate

Mon, 04/21/2014 - 14:29 | 4680252 WTF_247
WTF_247's picture

Easy solution : account value tax.

 

Anyone with more than $1,000 avg balance in an account must pay a 5% tax per year on the value of the account.

Mon, 04/21/2014 - 14:36 | 4680276 swmnguy
swmnguy's picture

Anybody who has accounts at a big bank already pays that.

Mon, 04/21/2014 - 14:36 | 4680278 Smegley Wanxalot
Smegley Wanxalot's picture

They do that already.  It's called 0% interest when the interest rate should be 5% or more.

Mon, 04/21/2014 - 15:11 | 4680423 CHX
CHX's picture

In real terms, yes. But not in nominal terms, yet.

Mon, 04/21/2014 - 14:45 | 4680324 headhunt
headhunt's picture

...said the IRS agent

Mon, 04/21/2014 - 14:35 | 4680272 swmnguy
swmnguy's picture

"Keynesian Knightmare?" That might be so if there were anything remotely Keynesian about US monetary and economic policy.  We can't say stimulus hasn't worked because there has been no stimulus.  Opening up the Treasury to sop up worthless debt instruments and recycling that money through Treasury Bonds is not stimulus.  It's a closed loop.  None of the money has made it out into the larger economy.  Therefore no stimulus.  For the rest of us, the past 6 years-heck, 20 years-have been deflationary with regard to our income and inflationary in terms of our costs.  So nobody's spending money.  If you count paying off existing debt as "saving," then yes, we're turning into savers.  Because we don't have a choice.

Mon, 04/21/2014 - 14:54 | 4680367 BeerMe
BeerMe's picture

Umm...Keynes firstly promotes defecit spending.  The U.S. is doing that.  The recycling money part is the U.S. putting forth wage and price controls without having to say it.  So yes the U.S. is a Keynesian Knightmare.

Mon, 04/21/2014 - 16:53 | 4680720 novictim
novictim's picture

Have another beer...and lay off the economics.  Deficits do not equal Keynesian policy.  "Keynesian" does not equal deficits.  

In no way does the current economic program of the past 3 decades equate to a Keynesian approach.  Trust me on this.  Or you will continue to be a fool and patsy for the Trickle-Down, Supply side, Free Market globalists who ARE the ones actually driving this bus.

Mon, 04/21/2014 - 14:38 | 4680273 dizzyfingers
dizzyfingers's picture

Not paying bills, car/school loans and mortgage, so "saving"?

I'm using only one credit card and that only for food, no fripperies.

Mon, 04/21/2014 - 14:50 | 4680348 BeerMe
BeerMe's picture

The sad part is saving would be making the economy stronger without Fed and government interference.  People and business that have actual money on hand will eventually invest/purchase bigger items (e.g. building improvements, vehicles, industrial machines, etc). 

Saving is always the beginning of building wealth.  You will never get ahead when all your money goes towards bill payments every month.  And now the Fed has made it so most will never get ahead.

Mon, 04/21/2014 - 15:03 | 4680391 DOGGONE
DOGGONE's picture

Look at third chart here
http://patrick.net/forum/?p=1230886
OBVIOUSLY we the people should be saving MUCH MORE dollars than we have been for a LONG time!

Mon, 04/21/2014 - 15:09 | 4680412 CHX
CHX's picture

Wake me once 64% are saving gold, though it won't take that many... (China and India are already more than enough, actually).

Mon, 04/21/2014 - 15:15 | 4680435 I Write Code
I Write Code's picture

"enjoy"?

I think what they got is people who "enjoy" buying ten dollar bills for nine dollars each, along with the classic Blondie who comes home with a stack of new clothes all bought on sale because she "saves" so much, and people "saving" money so they can pay their electric bills.

 

Mon, 04/21/2014 - 15:21 | 4680443 Ariadne
Ariadne's picture

With all the stores closing all thats left is saving and stealing.

I have invented a can opener for gas tanks, to bypass the locks and the 50+% state & fed pump tax. Fun for pyros.

Mon, 04/21/2014 - 15:17 | 4680444 XRAYD
XRAYD's picture

I would "like" saving money, if I had any left after I pay my bills, and pay minimum balanced off on credit cards.  In the meantime, I "like" it only only on Facebook!

Mon, 04/21/2014 - 15:19 | 4680450 No Quarter
No Quarter's picture

 I won't be hiring any more staff this year or making any new, significant purchases of tools or equipment.  Most all needed capital purchases and staff upgrades were made in 2013 and the very begining of this year. All spending was based on what will generate new/more revenue and/or efficiemcy and in-cash. Really the kinds of legitimate things credit, if used, should go towards, but i digress.. Couldn't imagine anyone leveraging up these days.  Outside of that i'm not spending anything.  Lots of business owners i know, esp those in the same industry, are of similar mind. Spare funds are going into things that hold some real/intrinsic value. The idea of traditional savings seems absurd. Gold and Silver are a good repository. Other than that, what instrument do you use to  "save"  ?

Mon, 04/21/2014 - 15:22 | 4680460 Spungo
Spungo's picture

People prefer to spend money when they think more money is easily obtained through work or whatever. People prefer to save money when their thoughts are dominated by uncertainty and fear.

Mon, 04/21/2014 - 16:15 | 4680611 No Quarter
No Quarter's picture

And there you hit it right on the head. Why would anyone spend if they can't see at least a sustainable return from expenses (excluding neccesities naturally)?  The thing i just do NOT understand is the propensity for frivolous purchases that don't serve some useful purpose and have a significant depreciating tendancy from the moment purchased. Worse, the tendancy to put things on credit just to have it today. My Dad always told me that anything worth buying was worth waiting until i can afford to pay for it out-right. He also taught me to buy the best quality i could reasonably afford.  My wife on the other hand really thinks is ok to buy shit on credit since you can budget around it. Such bullshit i can't fathom. Where do you learn that?

Mon, 04/21/2014 - 16:30 | 4680655 cro_maat
cro_maat's picture

MSM, Common Core, Celebrity Lifestyles, credit card advertising, sheeple without a clue - Hell I think they give you a Debt for Life guide with every Flu Shot.

Mon, 04/21/2014 - 15:33 | 4680495 Kirk2NCC1701
Kirk2NCC1701's picture

In hindsight, Keynes was a fraud.  The Banksters loved him, because they saw the potential of their wealth in his "theories".

Mon, 04/21/2014 - 17:10 | 4680774 novictim
novictim's picture

Enough with the idiocy here. The revisionism and the delusion...oh my head hurts! Check out our greatest KEYNESIAN president, FDR, on YOUTUBE:

I welcome the hate of bankers
-- FDR Speech
https://www.youtube.com/watch?v=D9yoZHs6PsU

There has not been a Keynesian policy in Washington since the late 1960s. (IDIOTS!)

Mon, 04/21/2014 - 16:06 | 4680579 Latitude25
Latitude25's picture

If hyperinflation comes it has historically been better to be leveraged to the max.

Mon, 04/21/2014 - 16:35 | 4680668 U4 eee aaa
U4 eee aaa's picture

Imagine if these idiot Keynesians raised the interest rates? Then all the responsible people who know how to handle money would have more disposable income. Do you think the phuds in the Fed could ever get around to figure something like that out?

Mon, 04/21/2014 - 17:05 | 4680751 novictim
novictim's picture

That would be very interesting if they did as there are no Keynesians in a position to change rates or anything else for that matter.

You must have time shifted from 1955.

Mon, 04/21/2014 - 16:45 | 4680695 devo
devo's picture

You have to save everything just to afford utilities. Spending isn't even an option. Duh. Anyone but PHDs would know this.

Mon, 04/21/2014 - 17:13 | 4680789 novictim
novictim's picture
FDR: WARNING ABOUT TODAY'S REPUBLICANS

 

https://www.youtube.com/watch?v=SUZGkNAUSvY

Mon, 04/21/2014 - 18:15 | 4680970 novictim
novictim's picture

Here is a Bruce Bartlett peice to confound you folks who insist (strangely) that the USA is following Keynesian economics...and of course the last time it did follow Keynesian policy was >30 years ago.

http://economix.blogs.nytimes.com/2013/05/14/keynes-and-keynesianism/?_p...

"...The irony, of course, is that Keynesian economics, which had dominated macroeconomic thinking since the war, was already dying. For decades it had been under intellectual assault by economists associated with the University of Chicago known as “monetarists.” Their most well-known spokesman was Milton Friedman, who argued against the Keynesians’ focus on fiscal policy – federal spending and taxing policy – and their inattention to monetary policy, which is conducted by the Federal Reserve.

As it happens, Friedman had said in 1965 that “we’re all Keynesians now” in the Dec. 31 issue of Time magazine. He later complained that his quote had been taken out of context. His full statement was, “In one sense, we are all Keynesians now; in another, nobody is any longer a Keynesian.” Friedman said the second half of his quote was as important as the first half.

But it wasn’t only those on the right, such as Friedman, who were abandoning Keynes; so were those on the left such as the Harvard economist John Kenneth Galbraith, an early and energetic supporter of Keynesian economics. In July 1971, he said that Keynes was obsolete because big business and big labor so controlled the economy that Keynesian economics didn’t work.

Galbraith said that it was “sad that Mr. Nixon has proclaimed himself a Keynesian at the very moment in history when Keynes has become obsolete.”

By 1976, it was common to hear world leaders denigrate Keynesian economics as primarily responsible for the problem of inflation. That year, Prime Minister James Callaghan of Britain, leader of the left-wing Labor Party, gave a speech to a party conference that repudiated the core Keynesian idea of a countercyclical fiscal policy. It only worked, he said, by injecting higher doses of inflation that eventually led to higher unemployment.

The following year, Chancellor Helmut Schmidt, of West Germany’s left-wing Social Democratic Party, likewise repudiated Keynesian economics. The German economy, he said, had avoided inflation by resisting the temptation to implement countercyclical fiscal policies during economic downturns. “The time for Keynesian economics is past,” Mr. Schmidt explained, “because the problem of the world today is inflation.”

On his blog last week, Paul Krugman took me to task for misconstruing the generality of Keynesian theory. My point was that policy makers in the early postwar era routinely accepted the idea that Keynesian stimulus was justified whenever the economy wasn’t doing as well as they wanted.

I acknowledge that this view derived mainly from economists who called themselves Keynesians rather than Keynes himself. He was, in fact, a strong opponent of inflation who would have opposed many “Keynesian policies” of the 1950s and 1960s, which contributed to the problem of stagflation in the 1970s that ultimately discredited those policies.

Economists and policy makers mostly forgot that Keynes prescribed budget surpluses during economic upswings to offset the deficits that he correctly advocated during downturns. In his 1940 book, “How to Pay for the War,” he advocated balancing the budget over the business cycle...."

Mon, 04/21/2014 - 20:57 | 4681326 Catullus
Catullus's picture

The bullshit of this whitewashing of Keynes is that it does site a single page from his magnum opus -- The General Theory. So who gives a fuck about what he wrote before his seminal work when the economics profession was dominated by people who actually had a brain. Even his writings in the 1920s were completely unoriginal. But given that he could read German, he had no idea.

His 1940 musings were in complete contradiction of what he was actually advising the British government to do at the time. That makes him at best a self-serving jerk.

But look at this article written by a monetarist at the Fed and this obscure article from 1940 about how Keynes didn't actually advocate inflation

Mon, 04/21/2014 - 18:17 | 4680982 LeicesterFox
LeicesterFox's picture

Isn't this called 'Paradox-of-thrift' > http://en.wikipedia.org/wiki/Paradox_of_thrift

Mon, 04/21/2014 - 21:26 | 4681384 wstrub
wstrub's picture

If they start to devalue the currency, people will be scared into spending for fear that it will be devalued again. 

Do NOT follow this link or you will be banned from the site!