This is obviously dangerous nonsense; of course individuals and lower governments can save, regardless of what Uncle Sam does.
In the above line of arguments, the most important-and dangerous-is Amarnath's claim that "We can't all save more. This is ALWAYS true. We couldn't have prepared for this shock by 'all of us saving more'."
Before we dive into the bookkeeping, let's state the obvious fact: of course state governments-and private companies and households, for that matter-could have been better prepared for the current crisis, if they had saved more over the years.
Suppose you have an income of $100,000 and that initially you don't save any of it.
In the previous section, I gave a simple counterexample to show why the truism "Total income = total expenditures" does not imply that "We can't all save more," contrary to Amarnath, Krugman, and Neil Irwin of the New York Times.
Even though it's true that a debt claim held as an asset by one person in the community must necessarily be a liability to someone else, it doesn't follow that it is impossible for everyone in the community to save and accumulate financial assets more generally.
It isn't just wrong, but dangerous when Keynesian analysts come along and assure everyone that private saving is literally impossible without such federal profligacy.
https://mises.org/wire/keynesian-fallacies-are-not-just-wrong-dangerous
In the above line of arguments, the most important-and dangerous-is Amarnath's claim that "We can't all save more. This is ALWAYS true. We couldn't have prepared for this shock by 'all of us saving more'."
Before we dive into the bookkeeping, let's state the obvious fact: of course state governments-and private companies and households, for that matter-could have been better prepared for the current crisis, if they had saved more over the years.
Suppose you have an income of $100,000 and that initially you don't save any of it.
In the previous section, I gave a simple counterexample to show why the truism "Total income = total expenditures" does not imply that "We can't all save more," contrary to Amarnath, Krugman, and Neil Irwin of the New York Times.
Even though it's true that a debt claim held as an asset by one person in the community must necessarily be a liability to someone else, it doesn't follow that it is impossible for everyone in the community to save and accumulate financial assets more generally.
It isn't just wrong, but dangerous when Keynesian analysts come along and assure everyone that private saving is literally impossible without such federal profligacy.
https://mises.org/wire/keynesian-fallacies-are-not-just-wrong-dangerous
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