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Politics : Politics for Pros- moderated

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To: Lane3 who wrote (101683)	2/22/2005 8:26:10 PM
From: kech	Read Replies (2) of 793727

But then what about the savings? We are at cross purposes and the mixed messages are a problem. We either want people to save or we don't. He said it two years ago. I don't recall him exhorting people to spend lately. The whole idea of the personal accounts in Social Security is designed to increase personal saving and to create a culture of the "ownership" society. It should do wonders for saving. The other problem reducing saving right now is that interest rates are extremely low. This reduces saving because the return on saving is low and it increases consumption because you can get interest free loans to buy cars and such. Finally as I said in an earlier post, the US is unusual in its degree of private home ownership. In addition the value of that housing stock has increased in value a lot and people see that wealth and consume more of their cash savings because they see that their real savings includes the wealth generated from the increase in their home value.

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