America's national savings rate has collapsed over three decades because of heavy money printing. This explains why socialist ideas are making a comeback despite their many past failures around the world.
The national savings rate has fallen sharply in the last thirty years. Central banks have printed vast amounts of money during this time, which has discouraged saving and encouraged spending and debt. This shift has left many people dependent on government support rather than personal savings.
Keynesians and others on Wall Street often ignore this trend. Yet the data shows how money printing weakens the economy's foundation. Without strong savings, the system relies more on state intervention, which opens the door to socialist policies that promise to fix the problems created by easy money.
Socialism has failed many times in history, but it now finds new appeal in America. The collapse in savings fuels calls for bigger government to redistribute wealth. This cycle continues as long as money printers keep expanding the money supply without regard for long-term stability.
Original Author: David Stockman | Source: Brownstone Institute
993.829 SRY