I predicted, very early on in this crisis, that consumers would react to it the way that consumers always do in situations such as this, which is that they would save.

Data in the FT suggests that I was right: the tendency to save has been very pronounced in five EU countries

Entirely true, the savings rate is up, this does normally happen.

If the new savings that people now want to make were redirected for social purpose then there would be a way to use them to keep jobs going and build the future we really need.

Why redirected for social purpose? Investing in anything attains that same goal……

12 thoughts on “Erm, why?”

  1. ‘which is that they would save’

    They aren’t saving. They are just not spending. There is a difference.

    ‘use them to keep jobs going’

    The current problem is not capital. It’s government lockdown of the economy. Having more capital does double ought nothing.

  2. Redirecting the savings to create jobs could simply be done by ending the lockdown and returning to normal.

  3. By “redirecting for social purposes” he means “stolen and given to me and my approved list of friends.”

  4. If the new savings that people now want to make were redirected for social purpose then there would be a way to use them to keep jobs going and build the future we really need.

    Wait, I thought the government could just print all the money it needed for ‘social purposes’? If that’s the case – and inflation can be controlled through higher taxation – then why would you need to go directly after people’s savings?

    Also, why would savings themselves not be considered a ‘social purpose’? Would not putting yourself in a position to minimize your burden on public services itself be a service to the public?

    Or is it that he wants everyone on the dole? Nothing outside the state.

  5. So shutting down all those places where people make discretionary purchases stops them spending and hence by default they end up saving. Gosh you need to be clever to predict that.

  6. @ AndyF
    Murphy is able, through his unparalleled wisdom, to distinguish between deferring purchases and actual saving. We had to use the car last week so, as we had only one-quarter of a tank left, I intended to buy some cheap petrol from a supermarket and diverted half a mile off our route, only to find the petrol station closed so we didn’t spend £40 on petrol. Murphy can tell that said £40 was not saving, merely deferment of expenditure. Mere humans, such as you or I, cannot tell that from the ONS data.

  7. Translated: People should not save, they should give all weekly excess money to Gov’t to waste on social purpose

    No more holidays, Christmas, property deposits…

    Maybe a bit malicious, but wouldn’t it be fun if he was anon reported for lurking outside schools and chatting up children. Then he can experience the totalitarian state he advocates

  8. The answer, ‘You should give me all your money’.

    The question? Well, that doesn’t really matter, does it.

  9. “Entirely true, the savings rate is up, this does normally happen. ”

    To be pendantic, most of the shops being closed for two months is not a normal I’m normally accustomed to.

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