Savings

[Martin Hash]

"Savings" is something monetarists praise. It fits into a conservative narrative of home budgets & conscientious behavior. It's a dogma taken on faith, never examined because accepting that savings is bad for an economy would make whole careers & reputations worthless. Keynesianists, believers in fiscal policy, pooh-pooh savings. In fact, they have their own insightful term for it: the paradox of thrift. Basically, one person's savings is another person's hard times.

The only appeal I can see for putting your money in the bank is one of personal security, like buying insurance. Additionally, saving money is mostly a form of predicting the future, and no one can do that, regardless of the assurances they give you. However, the real support for the veneration of savings, or "investment" when The Rich use the term, is as an excuse for accumulating vast wealth, implying the super rich are important to a society's well-being.

[boethius]

Thank you.

There is no such thing as savings other than stockpiling commodities.

"Saving" monetary instruments merely delays the use of your labor so someone else can benefit from it now, in the hope that the paper chit you are hoarding will be accepted as trade for some (hopefully larger) amount of commodities in the future.

[MilSpecs]

The only appeal I can see for putting your money in the bank is one of personal security, like buying insurance.

I thought that was the point - insurance with fairly small risk considering current and near future inflation.

[TheReal_ND]

Yeah I think that's part of the point. Not sure what the rest of the point of "saving" is though now that I think of it. Investments are really more like venture capitalism to a certain degree unless it's an appreciating asset, which few things outside of land and guns are. Some cars and other antiques I guess.

[MilSpecs]

Savings are liquid assets - insurance that pays off quickly if you need it quickly.

[boethius]

Savings are liquid assets - insurance that pays off quickly if you need it quickly.

Savings is not insurance.

Insurance is where a group of people accept the 100% probability of a small loss in order to cover a few of the group who suffer a large, unpredictable loss.

[MilSpecs]

Savings is also a small group of people accepting a probable loss to hedge against a larger, less predictable loss. For example: a couple (a small group) accepts the loss of probable income (investment growth or dividends) to hedge against a larger, less predictable future loss. They're avoiding paying the interest on future borrowing by losing current income. Is that not a good bet when you compare the current and predicted cost of borrowing money against the probable income from the same amount of money?

[katarn]

As directed by Dave Ramsey, savings are important.

[MilSpecs]

He's talking about savings as a hedge and means of avoiding debt.
I agree.