Deferred Consumption

I recently subscribed to a number of podcasts in an effort to drown out the unbearable background noise in the Fishkill office: Fox News. One of them was a program from WNYC and Public Radio International, The Takeaway. They’re running a series on debt. On November 17th (podcast, November 21, but hey) they interviewed Ronald Wilcox on the why Americans don’t save, and how we got to this predicament. The general explanation is that we’re optimists, and optimists, because they think tomorrow will be better, tend to live for today.

Savings is a somewhat interesting topic currently because we’re on the downturn of an business cycle because of a collapse in aggregate spending (because the cheap money has become more dear). So there was some discussion in the interview of whether or not saving helps or harms the economy. It was granted that in the short-term saving hurts, while in the long-term saving helps. That is, saving, or deferred consumption, reduces aggregate demand and thus causes an excess of supply, an excess of labor, and contraction in industry as workers are laid-off and factories closed in order to remove the excess, thus causing a decrease in aggregate demand which causes …. and so on.

Today there’s a story on a reduction in the amount of debt we hold: Saving Too Much (for once)?

(The take-away? The Takeaway needs transcripts.)

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One Response to Deferred Consumption

  1. WS says:

    The first thing you will want to do if you plan on playing with the Kinect in any way that is you want to be able to connect it to a computer. You can download emulator software for your new system to play them in all their glory- but there’s a hidden benefit. The Xbox 360 is not natively backwards-compatible with original Xbox games (due to the differing system architectures) and so backwards-compatibility is achieved through an emulator designed by Microsoft.

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