The Motley Fool Discussion Boards
Retirement Discussions / Retire Early CampFIRE
|Subject: Re: Ten Mental Exercises Leading To Freedom||Date: 4/3/2000 4:23 PM|
|Author: hocus||Number: 7393 of 794177|
In economics, I think this is called the Paradox of Thrift. The basic idea is that as people (collectively) save more (beyond a certain point), total savings would go down. This would be due to a shrinking economy.
Thank you for supplying some background. I'm still skeptical, but at least I'm "Informed Skeptical" instead of my usual circumstance of being "Ignorant Skeptical."
So they call it "The Paradox of Thrift." I guess since they have an official name for it and all, there must be some truth to it. NOT! I guess what I'd like to know at this point is, is this idea the product of one school of economics (such as Keynesians) or do all economists agree with the cockamamie idea (not to skew the question at all). Basically, I want to know who to blame.
No, I'll be good. There's probably all sorts of charts and things in the textbooks supporting this idea, so it's just downright boorish for me not to submit to the wisdom of it all. I just don't understand how it works.
We're saying that people save more, and therefore savings...go down. It's not the first time that hocus has been stumped. It's a puzzlement, though. Guess I'm not "economist" material.
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|