A Very Good Economics Article.......Worth reading...!!!
The Japanese save a lot. They do not spend much.
AlsoJapan
Has an annual trade surplus of over $100 billion, yet Japanese economy is considered weak, even collapsing.
Americans spend, save little.
Also US import more than it exports.
Has an annual trade deficit of over $400 billion.
Yet, the American economy is considered strong and trusted to get stronger.
But where from do Americans get money to spend?
They borrow fromJapan , China , and even India
Virtually others save for theUS
Global savings are mostly invested in US, in dollars.
India
China
Japan
Result:
TheUS
So, as the world saves for theUS
Today, to keep theUS consumption going, that is for the US economy to work, the countries have to remit $180 billion every quarter that is $2 billion a day to the US
Otherwise theUS
So will the global economy.
The result will be no different if US consumers begin consuming less.
A Chinese economist asked a neat question.
Who has invested more, US inChina , or China
TheUS has invested in China less than half of what China
The same is the case withIndia
But theUS has invested less than $20 billion in India
Why the world is after US?
The secret lies in the American spending, that they hardly save.
In fact they use their credit cards to spend their future income.
That theUS spends is what makes it attractive to export to the US
SoUS
The result:
The world is dependent onUS
By its deepening culture of consumption, theUS has habituated the world to feed on US
But as theUS
It's like a shopkeeper providing the money to a customer so that the customer keeps buying from his shop. The customer will not buy; the shop won't have business, unless the shopkeeper funds him.
TheUS
And the world is like the helpless shopkeeper financier.
Who isAmerica
Japan of course.
Yet it'sJapan
Modern economists complain that Japanese do not spend, so they do not Grow.
To force the Japanese to spend, the Japanese government exerted itself.
Reduced the savings rates, even charged the savers Even then the Japanese did not spend (habits don't change, even with taxes, do they?).
Their traditional postal savings alone is over $1.2 trillions, about three times the Indian GDP.
Thus, savings, far from being the strength ofJapan
Hence, what is the lesson?
A nation cannot grow unless the people spend, not save. Not just spend, but borrow and spend.
Dr. Jagdish Bhagwati, the famous Indian-born economist in theUS
Start spending, on imported cars and, seriously, even on cosmetics! This will put all nations on a growth curve.
"Saving is sin, and spending is virtue."
Before you follow this neo economics, get someone to save so that you can borrow from them and spend.
This is whatUS
The Japanese save a lot. They do not spend much.
Also
Has an annual trade surplus of over $100 billion, yet Japanese economy is considered weak, even collapsing.
Americans spend, save little.
Also US import more than it exports.
Has an annual trade deficit of over $400 billion.
Yet, the American economy is considered strong and trusted to get stronger.
But where from do Americans get money to spend?
They borrow from
Virtually others save for the
Global savings are mostly invested in US, in dollars.
Result:
The
So, as the world saves for the
Today, to keep the
Otherwise the
So will the global economy.
The result will be no different if US consumers begin consuming less.
A Chinese economist asked a neat question.
Who has invested more, US in
The
The same is the case with
But the
Why the world is after US?
The secret lies in the American spending, that they hardly save.
In fact they use their credit cards to spend their future income.
That the
So
The result:
The world is dependent on
By its deepening culture of consumption, the
But as the
It's like a shopkeeper providing the money to a customer so that the customer keeps buying from his shop. The customer will not buy; the shop won't have business, unless the shopkeeper funds him.
The
And the world is like the helpless shopkeeper financier.
Who is
Japan of course.
Yet it's
Modern economists complain that Japanese do not spend, so they do not Grow.
To force the Japanese to spend, the Japanese government exerted itself.
Reduced the savings rates, even charged the savers Even then the Japanese did not spend (habits don't change, even with taxes, do they?).
Their traditional postal savings alone is over $1.2 trillions, about three times the Indian GDP.
Thus, savings, far from being the strength of
Hence, what is the lesson?
A nation cannot grow unless the people spend, not save. Not just spend, but borrow and spend.
Dr. Jagdish Bhagwati, the famous Indian-born economist in the
Start spending, on imported cars and, seriously, even on cosmetics! This will put all nations on a growth curve.
"Saving is sin, and spending is virtue."
Before you follow this neo economics, get someone to save so that you can borrow from them and spend.
This is what
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