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To: mikegi
The Paradox of Thrift has been removed from the newest editions of Dr. Samuelson's Economics. It is a Keynsian theory that even the Keynsians have discarded.
46 posted on 10/28/2002 9:37:34 PM PST by Lee_Atwater
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To: Lee_Atwater; mikegi
Exactly. Saving is nothing other than investment, i.e. an allocation of capital.

Putting cash in your mattress hurts the economy, certainly. Putting your money into financial instruments such as bonds, CMOs, etc. strengthens the general economy as well as your own portfolio.

Consumer spending for the sake of consumer spending depletes invested capital and creates a negative return. It discourages companies from developing new products and increases the real cost of capital for all borrowers.

57 posted on 10/29/2002 8:07:45 AM PST by wideawake
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