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A rapid increase in savings rate could lead to more trouble in the short term in the US.

A rapid increase in savings rate would indicate an increase in some combination of investment, net exports, or net private wealth creation through government deficit spending.

... but how could it cause problems? ... the increase in aggregate saving cannot occur unless the increase in incomes from which to save occurs first.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Aug 27th, 2008 at 01:58:56 PM EST
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