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10 sats \ 3 replies \ @Undisciplined OP 18 Oct \ parent \ on: Answering the Confused Critics of Austrian Economics econ
I'm not sure what caused the spike in savings. I think it happened before all the covid stimulus went out. Inflation likely caused the high consumer debt levels.
I am fairly sure that the spike in savings was caused by insecurity and worry about the future in the general populace about the scamdemic. I am, also, fairly sure that the spike in spending came about due to the printing press for the stimmies. It is just that the government economists only have one gear, it seems, everything for the state.
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the spike in savings was caused by insecurity and worry about the future
That sounds right, but it had to come from somewhere. Like you said earlier, people couldn't do a lot of their normal spending. It would be wild to me if such a straightforward lifestyle adjustment could so rapidly generate savings. I think many people also stopped paying their rent and took advantage of eviction moratoria.
The rise in debt that I was talking about is consumer debt, like credit cards. Government stimulus checks should reduce that, if anything.
I think it's people trying to make all their payments as prices rapidly outpace wages. You can see this in the composition of spending: most essentials are rising, while luxuries are declining.
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The expansion of the amount of money in the economy has been occurring ever since the first year of the scamdemic, It just got worse from 2020 with some of the ridiculous omnibus spending bills made by the statists. I think that caused the inflation, which, in turn, caused people to load up on their credit cards. Many people in the US are not far from the poorhouse, one unexpected expenditure away from illiquidity, bankruptcy and starvation. Small problems become blown out of proportion when you have no cushion for safety. Safety is a major concern and a trap for people.
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