We should save more

You should read 1932’s A Bubble that broke the world by Garet Garrett. It’s a primer for our age explaining how central banks contributed to the debt driven up to to the 1929 stock market crash and great depression. You can learn about stocks deterioration before hitting rock bottom. Central bankers were pushing on a string like in 1929. The more debt that is made, the more unproductive the debt becomes. That’s not popular. What is popular is the magic money tree, because a country that prints its own money so the stimulus packages that are printed in US and Europe are going to give headaches later on. That leads to deflation. The only way out of it is to get the Americans savings up dramatically. The reason why we made out of World War II depression was Americans savings were 25% highs increased by wartime rationing and income gains from exports and World War II. The Great Recession caused by Wall Street had done sometime to Main Street is fresh in people’s minds where Wall Street got a huge bailout allowing for quick recovery and few were sent to prison. There is a huge disconnection between the two. There is 30 million jobless on main street after 6 weeks. The ones lucky enough to have jobs are seeing decrease in wages. There is a general feeling of anxiety across the country. Meanwhile the stock market had its best time in 33 years. This leaves the financial sector immune from bankruptcies and layoffs that happens to mainstreet corporate america. If the federal reserve is going to inject trillions of dollars into capital markets like in 2008, it will only benefit the better off segments of American society. The longer this exists, the greater the conflict between rich vs. poor, corporations verses individuals, current vs. future generations, connected vs. alienated. The federal government could look at morale hazard or any risk of future financial stability infecting the real economy. If we only accept that everything will be favor with anybody that is already privileged, nothing will be accomplished. The rich have this idea that the rest of the country is depended on them and not the other way around. The solution is for the government and private sector to find balance.