Stop Saving Now!

This article is so ridiculous is so many ways, it's hard to know where to start.

Please note, readers, that Mr. Gross may have someone's ??? or some company???s ??? best interest in mind, but it is certainly not the best interests of average Americans.

People who save money are 'savers' Mr. Gross, not ???hoarders???. It used to be considered virtuous to save; now apparently the press thinks it isn't.

Being conservative in the face of economic uncertainty is a rational response.

Buying on credit is what got us into this mess. It will not help get us out of this mess.

No one should buy anything unless:
a) They can afford it
b) They need or want it.

Certainly, you should not buy something just because a Newsweek reporter thinks you should. Remember, this person knows absolutely nothing about your personal financial situation and your needs and wants. Only you know those things for sure.

Years ago, beer companies showed ads on TV encouraging people to drink without qualification. Now, in response to the tragically high loss of life due to drunk driving, those same beer companies add the phrase, 'Please drink responsibly.' to their commercials. The new message is: drinking all you want is not always such a good idea because sometimes that can lead to people getting hurt. I think consumer goods companies should add, "Please spend responsibly." to their commercials. In other words, spending because someone else wants you to is not a good idea.

This is one of the most stupid articles I can imagine reading in newsweek...

Let me get this straight - Excess investment during the end of the Clinton administration led to a burst IT bubble, and instead of cleaning up like we should Greenspan lowered interest rates. To 'stimulate spending' (instead of re-group savings into capital) the US instituted several policies to encourage loose lending standards and home ownership - so people could mortgage homes and consume their wealth.
Of course, with most of the inflated money supply going into the housing sector, since that's what was essentially subsidized (other than the military and reconstruction projects in the middle east), we could assume house prices would continue to rise BEYOND 10% A YEAR - indefinitely.
To get the insane risk of the books of our financial system, geniuses created more and more instruments to securitize the debt and externalize the risk.
Now that the system is collapsing (again - it keeps happening), the solution is MORE spending of MORE credit? So, all those new homes planned for completion in 2010 should continue development? There's not too many already - so over-priced that we need monster loans to afford them?
Now we need lower interest rates - meaning further escalating the rate of the increase in the money supply?
We need people who never ran businesses to take on managing the entire US economy? Wait, I don't work for Obama, why is he now my CEO? Can he fire me?

The one absolute certain way (proven over and over again) to encourage spending and investment is to reduce taxes.
Alas, if there was a single reference in this article to reducing capital gains taxes or rewarding investment through the tax structure, I didn't find it.

I loved the cartoon on page 21 of the March 30 edition of newsweek where a young kid tells his mom he cleaned up his room and he wanted his allowance. But the room was a total mess with clothes and toys strewn about. Under the cartoon was the caption which read, AIG EXECUTIVE: THE EARLY YEARS!

Mr:Obama will never give to the people any good cash, his not goin for you his going for Banks Institutions and Big Business,what he need all of you spend as much you can untill you people don't have any Dolar in your pocket, I still don't know what is behind at all this but is just about time when we dind out,what is going on, to me just give to all this big Corporations great money is because he think they will back up on him after four years,that is part of the deal, he don't care about you or me, this is just to keep his moment up how long you think we can handle this situation? if you request a loan for $200,000,00 and have you own business do you know about business? how you will pay back this money a month, plus buy your own stuff to your place the rent of your place, do you like to go,on probable not what they want is take that money no matter what to said it is working after that,who's take over the problem? do you believe that is the only problem we are dealing right now, you have no idea what is looming with tax, and the National devate of trillions of dolars we own, this is like you have a credit card without job!......

I think people who either have lost their jobs or are afraid of losing their jobs don't have much of an incentive to spend. And when the unemployment number for just 1 month reaches 650,000 people, it tells me that there are really a LOT of people without much incentive to spend. So I think Daniel Gross' advice to spend is rather disingenious. Maybe his essay would have been better spent on encouraging business to hold onto employees instead of laying them off. I wonder how many companies really work to find ways to hold onto people instead of just letting them go as a knee-jerk response to economic uncertainty. How many people could have been kept employed at AIG for $165M rather than using that money for bonuses?

This is the same pap that came out after 9/11. Go out and shop till ya drop Americans, it's your patriotic duty. Pathetic! Saving is the key to building wealth, not spending. If people want to start a business, fine, go for it. Just remember a majority of small businesses fail within five years. But starting a business is certainly better then wasting money buying a bunch of junk you don't really need.

We all Wishing to have our own business one day, but not now not like this, the reason is the interest still pretty high can't borrow any money with these high interest and no body buy almost anything,people buy only what they need and others just don't have any cash, we still at the same point for me I don't whant to buy from china is because all is fake the material is not right buy from china is not the solution we need to make product's made in USA, and reverse the sistem was create in 1978. believe it or not, is after you !......

I have to ask Mr:Obama, what is your plan after you have a trip from California, I recall you said you will export good from USA, to other Country's ?, souds good but I don't think this will happen, sample I use to buy product's made here, just a pair of shoes for walk cost $89.00, the brand New Balance, for other people outside this Country any Country is 3 times, the cost here from us, do you think this people will buy products from us?, all this people stop buying product's from us since 1980, because the DEVALUATION in 1978, after this time all this people use to visit us and buy product's from us, they are no longer to buy any product's from us,after that was no more revenue, all the Presidents just ignore this economic situation, untill now unfortunately this happen to you and you said things when you not realize how big will be this problem, and Honest I don't believe your team can fix this problem you can't reverse all this for what happen 30 years ago, you can't reverse the deal's from International Monetary Association, you can't reverse what Bank's Intitution's and Real State did at that time 1980, and untill now all we paying the price, probable you not ben aware what is coming or probable you know that is why you still helpping the Banks and Creditors, with people's money that is not the solution, now is when you have for sure to make some changes the ones what you was talking about, if not sorry but you are about change our future, to save the same people is ben taken all our money then remember you have tree more years to go!......

No, never take any toxic risk again. Jumping blindly into unnecessary risks was one of the main factors that brought about the current financial mayhem. Though it had made several people very rich, the great majority of others became poor.

If lavish spending is truly the only way to economic recovery, then let it be, provided the government is willing to print enough money to fork out $100,000 free for each and every one of the 310 million Americans. With some $31 trillion swarming the market, what else cannot be recovered or revived?

Does anyone want to take any unknown or dubious risk once more?
THINK ABOUT IT.
(Tan Boon Tee)

Daniel Gross is pointing the finger at the wrong people when he says 'stop hoarding' ...he should be pointing his finger at the President and the Democratic congress and say 'Stop Taking.' The reason people are hoarding is because following the reality of losing what they had already invested, the government led by the President and his party wants to increase taxes on the very people that Gross expects to invest and lead the way. Perhaps if the government gave the people back a larger share of their own money, and I mean the people who actually pay the bulk of the taxes, not handouts to those who don't, then we would have more to invest. Instead, he gave our money to the very people who squandered it in the first place. We need more incentive to invest. The last round of government gifts found most of its way into Walmart, and ultimately China. The article misses the point and so does our present government.

Daniel Gross is pointing the finger at the wrong people when he says 'stop hoarding' ...he should be pointing his finger at the President and the Democratic congress and say 'Stop Taking.' The reason people are hoarding is because following the reality of losing what they had already invested, the government led by the President and his party wants to increase taxes on the very people that Gross expects to invest and lead the way. Perhaps if the government gave the people back a larger share of their own money, and I mean the people who actually pay the bulk of the taxes, not handouts to those who don't, then we would have more to invest. Instead, he gave our money to the very people who squandered it in the first place. We need more incentive to invest. The last round of government gifts found most of its way into Walmart, and ultimately China. The article misses the point and so does our present government.

Based on this article I plan to save even more.

Mr Gross:

You sneer at those who manage their savings by finding an insured depository or Treasury bonds. The American investor is not risk averse, they are averse to the excesses shown by the "elite" management in place in virtually every boardroom in the country and every political organization; down to and including the police, fire departments, and yes, even the sanitqation departments as demonstrated by the messes generated by the weather disasters of the last several years. When reasonable leashes are installed to allow shareholder control and punish corporate excesses, the American investor will return to making reasonable investment in risk. Those of us in the (dirty collar) working class have made a decision on our life style and consumption that says "I can get along with what I have saved at 2.5% and don't aspire to a MacMansion or a Masarriti". My wife ond I lost nothing in
the last several "busts" because our savings reached the target point where we could retire before the turn of the century and we were not greedy for more.

jpsammons@aol.com

Thank you for getting more fools to jump into the stock market with this artilcle. You will provide myself and others who short the market a nice profit in the near future. What you and the clowns in Washington don't understand is that living standards are in the process off falling permanently in the US. The average semi-skilled worker In China makes $150 per month compared with $3000 here. Until these come closer to equivalancy, nothing will stop the decline of living standards in the US. In the Great Depression, most people lost their shirt including the bankers. In the coming depression, the bankers will still be sitting in the lap of luxury while the rest suffer intense hardship. I had some hope that Obama was going to bring CHANGE and voted for him - but he and his advisors are more beholden to the bankers than Bush. This misallocation of taxpayer resources will haunt the US for decades to come.

Mark Sorensen
Ashland OR

The ones who have reaped the benefits of the redistribution of wealth that has occurred over the last 29 yrs. need to start spending. The rest of us are struggling to pay mortgages, tuitions, food, utilities, and the increasing lack of benefits. And don't give me the b.s. about how I should not live above my means, because I do not and save as much as possible. Which is why I can pay my bills and have an ample contribution to my retirement. Which has took a steep dive over the past two years. All of this while wages have remained stagnant (if not actually declined) for most of us. And the few at the top have had their salaries increase to hundreds or thousands of times of that of the average worker. They have made out in their takeover of Washington and implementation of their own brand of socialism. So now the onus is on them. Get out there you rich money hording thieves and spend your ill gotten gains to fix what you have created. I cannot and will not buy into the "hey - you guys need to consume" theory. So as to increase your profits and sure up your obscene pay and bonuses. I subscribe to the "let em fail" policy. Why do we think that we NEED these thieves to stay in business. If they go down, there will be other motivated and bright Americans jumping at the chance to prove themselves as competent and able entrepreneurs. That is what made this country what it is.

I haven't stopped spending yet!

The paradox of thrift is an economic expression of the 2nd Law of Thermodynamics. We can only trade-off uncertainties from one system to another, we cannot (yet) reduce the total global uncertainties. We have believed that large pools of personal and institutional credit (money) are safer than smaller pools, a believe that is true until the pools are too few or too large, Therefore, for the past 30 years and more rapidly over the last decade we have allowed fewer and fewer institutions and individuals to accumulate an ever larger percentage of our wealth through deregulation and lower taxes on the upper 5% of incomes and capital gains while many of the rest of us have borrowed to finance daily life. We now have a badly unbalanced system. I have written much more on this subject at dismountingourtiger .

Edwin Lee
Bend, Oregon