by Jeffrey Tucker, Laissez Faire Books:
Americans today live like there’s no tomorrow. You can see this in the
data regarding retirement. People behave like they will never retire,
and the prophecy is self-fulfilling. Under these conditions, they won’t.
A new survey shows that 57% of households have less than $25,000 in total household savings and investments. And the trend line looks terrible and is getting worse. Meanwhile, everyone is living longer, but not healthier, meaning that people will be more dependent in their older years than ever before.
The moralists are quick to condemn this as resulting from a deep character problem in all of us. But economists prefer to look more deeply at institutional factors. What could account for such shabby planning on the part of American households?
Look at monetary policy. Where’s the reward for saving? It’s not there. The Fed has nearly abolished the normal rate of return on savings.
Read More @ LFB.com
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Americans today live like there’s no tomorrow. You can see this in the
data regarding retirement. People behave like they will never retire,
and the prophecy is self-fulfilling. Under these conditions, they won’t.A new survey shows that 57% of households have less than $25,000 in total household savings and investments. And the trend line looks terrible and is getting worse. Meanwhile, everyone is living longer, but not healthier, meaning that people will be more dependent in their older years than ever before.
The moralists are quick to condemn this as resulting from a deep character problem in all of us. But economists prefer to look more deeply at institutional factors. What could account for such shabby planning on the part of American households?
Look at monetary policy. Where’s the reward for saving? It’s not there. The Fed has nearly abolished the normal rate of return on savings.
Read More @ LFB.com
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