"There is only one source of genuine investment. That is savings. Savings comes about from forestalling consumption. You have to give up things today so that you can have more tomorrow. There is no other path. The attempt to skirt that savings obligation and replace it with fiddling by the central bank and the government is pure folly. At best, it creates another round of false booms that end in busts. At worst, it destroys wealth and creates nothing at all. (...) The beautiful thing about this example is that it shows that government can’t always get what it wants. In fact, it rarely gets what it wants. The whole of its economic policy models are predicated on the idea that people respond to economic signals like machines. Change the signal and people fall in line. But that’s not how it works in the real world. People have brains and they have memories. The memory of 2008 is still with us, and it’s a good thing, too, for the prosperity of the future can come only from the savings of the past." dailyreckoning/the-triumph-of-scrooge-mcduck/
Posted on: Mon, 12 Aug 2013 15:18:01 +0000
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