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Politics : Politics for Pros- moderated
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To: Lane3 who wrote (101686)2/22/2005 8:59:33 PM
From: kech  Read Replies (1) of 793731
 
People need to save more than that. If people saved as much as responsible people should, the economy would tank.

This way of looking at the issue shows a curious mixture of phenomenon that are usually treated quite separately. Whether the economy tanks or not is a short cycle issue and this is where macro economics comes in. I.e. what can we do to get the economy to get out of a slump and in turn how to keep it from overheating.

The long term issues such as a low savings rate are usually thought of as more structural issues. Changes in incentives for saving or penalties on consumption (sales taxes or VAT taxes) are used to influence secular (non-cyclical) or structural issues. Hence the SS stuff is more in this category.
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