A rise in the level of saving can reduce aggregate activity temporarily but only a sustained high level of saving makes it possible to have the sustained high level of business investment that contributes to the long-run growth of output. ↗
I am not suggesting that all those missionary organizations working in Haiti should pack up and go home, but I am urging them to understand that Haiti does not need clever Americans with newly contrived schemes for saving their country. ↗
Once the brokerage house, rather than the bank, became the locus for American savings, that money would find its way into the stock market, because the broker was someone with a much higher tolerance for risk than the banker. ↗
To consider only one other such witness: the followers of the Buddha have at least as much right to appeal to individual and social experience in support of the authority of the Eastern saviour. ↗
In economic panics throughout history, the wiping out of the savings accounts of lower earners and the middle class has often led to social revolution, sometimes violent upheavals. ↗