Re: A perspective on saving

["John O'Donnell" <jackodonnell@xxxxxxxx>]

Barry Brooks wrote:
>
> Please tell me why the following is wrong.
>
> It is absurd to believe that any wealth is created by just simply saving
> money.  Honest saving is only defered consumption.  If so savings has no
> relation to investment.

True, saving money has nothing whatever to do with
investment. It is only that money saved by one person is
available for lending to others who do purchase items of
investment. However, even this relationship is an
exaggerated representation of a need of money for investment
to occur. If the item purchased already exists, the present
owner of the item could use it as an investment. If the item
did not previously exist, the producer could likewise use it
as an investment.

> Investment may make/take money, but when a loan is repaid with interest the
> interest is just a measure of the artificial scarcity of money.

No, interest is the cost of renting money. It is little
different than renting the item the money buys, only the
present owner prefers to have money returned and not the
item the borrower wants. Also, because money does not suffer
from wear and tear as do items of stuff, there is only the
loss of purchasing power from inflation or expected
inflation that must be included in the rental rate.

> Usury would
> be rare if the government made investment funds available for needed repair,
> expansion, and research.  Saving as a means of getting something for nothing
> is an illusion or a way of stealing.  It's no accident that the interest
> rate and the inflation rate move together under most circumstances.
>
> Defered consumption means that the saving of those who save and those who
> spend their previous savings must match to avoid price changes.  If
> automation allows few workers to do the work a few workers could easily
> carry lots of spenders of savings.  Better yet, let's just take care of each
> other, and the systems upon which we all depend.
>
> One can't save hamburgers for retirement. (Frozen for forty years?) Current
> consumption requires current production.  Eating after retirement requires
> that the economy at that time can produce fresh hamburgers. If the system
> destroys natural resources or is sapped by privitizing bandits the savings
> will have no later value.
>
> As for the shortage of workers, that's crazy propaganda.  Due to automation
> we have a huge surplus of labor. That's why we need demand stimulation,
> right?

Fortunately, this is nonsense. It makes no more sense than
saying whatever is should belong to everyone. Under such
conditions, who would ever make anything?

--
			-- jbod

		Tax Privilege, Not People
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