Politics
Save or Spend? How do We Fix the U.S. Economy?
Jul 23, 2010
By Steffen Schmidt
By Steffen Schmidt
I recently read an article that Japan’s “Lost Decade” – wait a minute it must be “Two decades” by why are economists still calling it decade?!
But I digress. Anyway, Japan is suffering from an economic crisis of slow growth and malaise because the Japanese save too much. I understand that Obama and the Western leaders want Japan to spend more and encourage their people to “Go out and Shop.”
Wait a minute – I heard that right after September 11 and it was “W” telling Americans to go out and shop!
But I digress. Then I saw an article that said that the Japanese deficit was too high and was messing with their future economic prosperity and that they needed to spend less.
I read an article that said that Americans were not saving anything, I mean literally there was a big negative savings metric among US consumers. I guess that’s called borrowing more than you are saving and that that was terrible and Americans needed to save more.
Wait a minute! I just heard Obama say that the Europeans were saving too much and being cautious and the governments in Europe needed to encourage their people to spend more to stimulate their economies and have them buy more American export stuff.
Then I read that the Europeans are spending so much their governments are in "sovereign debt default" and they needed to stop spending so much and get their budgets balanced.
Wait a minute! I also just read that Obama and the Japanese are saying the European governments need to spend more and keep stimulating the economies because the recovery is anemic and it will fall back into a great recession or worse unless they spend more.
Excuse me for a minute.
There, my headache is starting to go away. It’s amazing what a breakfast Bloody Mary will do for an economics headache.
So not being an economist (thank God) and not understanding all of this “not enough savings” and “not enough spending” my question to you is this.
Should Americans go out and start spending more and heat up their credit cards to stimulate the US economy more?”
My second question is “Should the US and European governments spend more to keep their economies from sinking lower (even though some of those governments like Spain, Greece, Ireland, and so forth are already so far under water if they were a boat the headline would read “Greek economy sinks to bottom of Mediterranean Salvage crews and divers on the way?”
My third question is “Do economists know anything or are they just like someone with Turret’s Syndrome babbling “Spend More” and “Save More” in a random repetitive rhythm maybe even with a little sing song attached like the woman by the bus stop in Seattle who was sing songing again, and AGAIN until even the other homeless people sitting at the bus stop told her to shut up, “Vagina, uterus, Starbucks,” “Vagina, uterus, Starbucks,” and breaking into a ZZ Top melody as the chanting got louder and more complex? (I have pictures and witnesses).
I really need to know the answers to these questions because:
a. Should I apply for a few more credit cards and start burning them up on line, at the shopping center and Lowe’s? or
b. Should I hunker down, turn the heat up (summer) down (winter) and start squirreling away my money in coffee cans. or
c. Should I apply for that 2.3 mil NSF grant to help stimulate the economy or should I write Obama and tell him to “stop wasting the taxpayers money and balance the budget?” and
d. Should we pretty much shut down all the economics departments or at least find a shelter for them to spend the night c’ause they seem to have more of a clinical mental condition than a science going there?
I need these answers sent to me on the back of a $500 Walmart gift certificate c’ause I’m pretty much going with the George W Bush advice “go out and shop” and I’m maxed out on my Visa, Mastercard, Carte Blanche, American Express, and … well you get the idea.
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Steffen Schmidt is a Professor of Political Science and Public Policy at Iowa State University. He provides weekly political analysis for Iowa Public Radio, and periodically in Spanish for CNN en Español. He also serves as chief political and international correspondent for InsiderIowa.com.
