The more people save the less economic activity there is in the UK. That is for two reasons. The first is that savings take money out of the economy: they are not spent, so that has to be true. And second, because savings do not fund investment (they go into second-hand shares and property in the main, instead) they do not add value to the UK economy. They do instead simply inflate the value of financial assets.
Creating more investments which can then be transformed into those financial asserts now makes more money. Therefore more real investment will take place as a result of high financial asset prices.
He doesn’t even get the basics, does he?
There is good reason for this. Of course it makes sense for an individual to save. I do not dispute it. But as I say time and again on this blog: just because something makes sense for an individual does not mean it makes sense for an economy as a whole: in fact the opposite is often the case. And that is true here. So long as everyone does not save then saving for retirement can work because the assets into which money is saved are not overvalued enough, and the economic effect of saving in the current period is not big enough, for massive economic distortion to result. But is everyone does it then the opposite is true: total economic distortion results: asset bubbles are created whilst current incomes are suppressed and the result is an inevitable economic meltdown when it is appreciated that there will never be a market able to buy the assets that must (in the case of pensions) be sold to provide an income for a person in retirement. And I stress, pension calculations do assume that the capital is consumed and so assets must be sold.
That assets must be sold in order to fund pensions is a good reason to have markets in secondary investments, no? So they can be sold to fun pensions?
Haven’t we now just justified the existence of stock markets? And even just said that if we all invest in local authority bonds and direct investments in hospitals, then we’re still going to want a secondary market in them?