Comment by ThomPete
9 years ago
Discouraging savings is actually the point. We should tax money that sits idle and provides tax benefits to money invested.
If you can build wealth around being active rather than just reaping the benefit of interest of interests then that should be encouraged rather than just grabbing and keeping.
You would force people to consume? There's diminishing returns to that. At some point there are fewer worthwhile things to spend on and you start creating an system of make-work with the attendant environmental destruction and resource exhaustion. Free markets are neutral on these questions, it's policy that distorts social preference away from conservation and towards unsustainable growth that exacerbate the situation we're in now.
How would I force them to do it?
They would still make money if they kept them it would just be less beneficial than it is now. No long term capital gains as an example.
People with little money consume everything they have already, they have no choice, no retirements no nothing.
> We should tax money that sits idle and provide tax benefits to money invested
>> You would force people to consume?
That's a complete misreading of the comment
Money in a savings account is money invested.
> money invested
Only in the most inefficient way possible. The 'problem' is banks are limited in what they can do with this money which ends up creating investment bubbles and other market distortions which hurt the economy overall. If you slowly transitioned banks so they could not invest this money over say 100 years the net result would not be harmful.
In the end money is not actual wealth, it's simply a representation of wealth. Anything that turns money into more money needs an intermediary where some cash flow is generated. And those intermediary's are often harmful see in excess like pay day loans.
>>The 'problem' is banks are limited in what they can do with this money which ends up creating investment bubbles and other market distortions which hurt the economy overall. If you slowly transitioned banks so they could not invest this money over say 100 years the net result would not be harmful.
Um, no. The type of investing you suggest includes the risk of losing the money. This doesn't work with commercial banks because they are insured by the federal government, i.e. the taxpayer. When people put money in the bank they expect it to stay safe. That's why the concept of a bank exists in the first place. If there was the risk of it evaporating due to bad investments, that would basically be more of "privatized gains, socialized losses."
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You want to forbid loans?
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Thanks to fiat money there's no money sitting idle: if you stuff your paper bills under a mattress, the central bank is just gonna print more money (temporarily) to reach its eg inflation targets. (And if you take your money out from under your mattress, they will print less money for a while.)