On Fri, Jan 23, 2004 at 09:01:09AM -0800, Bryan Murdock wrote: > On Fri, 2004-01-23 at 08:42, Ross Werner wrote: > > On Fri, 23 Jan 2004, Andrew Jorgensen wrote: > > > > Are you kidding? There's a reason the interest rates are low right now, > > > > don't invest, spend spend spend, take out a loan and spend some more! > > > > The economy needs you! ;) > > > > > > Investing /is/ spending and helps the economy immensely. Saving is also > > > spending because the money I put in the bank gets loaned back out to > > > someone else who is more likely to "spend spend spend" than I am, or > > > invested, which again allows someone else to spend it. > > > > IANAE (economist) but I seem to remember hearing that, even though this is > > true, there /is/ some reason why if everyone seems to be saving money, > > even though it's loaned out to other people the economy doesn't do as > > well. And when people spend a lot, vice-versa. Even though the bank will > > lend out your money to people who /will/ spend it. > > Seriously this time, I think you are right and that's exactly why Mr. > Greenspan plays with the interest rates: to encourage folks to not > save so much in times like this, or to save more in times of plenty. I > don't claim to understand exactly why, nor do I really endorse spending > all your money in the name of helping the economy like I jokingly > suggested above.
Spenders and savers both constitute important stimuli in the modern theory of macroeconomics, regardless of the boundary values. Justin ____________________ BYU Unix Users Group http://uug.byu.edu/ ___________________________________________________________________ List Info: http://uug.byu.edu/cgi-bin/mailman/listinfo/uug-list
