Is it true Veeky Forums? Is saving worse for the economy than investing?

Thank you, but hoarding money does even less for employment than saving.

For you individually, hoarding is indeed an intelligent decision, but for employment in general, hoarding does absolutely nothing.

You see, the problem with Von Mises is that he assumes that every monetary unit in your possession is being put to it's best use and obtaining the goods or services which have the largest 'marginal use-value' (a purely Mises psychological term). Tell me again how that's possible when you may not understand or even have perfect information about the economy. That's whats puzzled me the most about the economists who say hoarding is reasonable under certain circumstances or inevitable, even worked into the framework of their economic theories.

>most people would rather have a nicer neighborhood than a bigger tv
Source?
I hate my fucking neighbors. I'm shopping for a Glock to pop one in the ass. Fuck roads

>Fuck roads
They told me I could be anything. So I became anarcho-capitalism

The economy is based on the idea that self interest benefits everyone in the long run. If you want to make a lot of money you create a business that gives a product or service that a lot of people will pay money to obtain. You benefit by getting a lot of money and the people benefit by gaining access to a product or service they feel is worth the value of the currency they use to obtain it.

Saving is 'bad' for the economy in that it's money that isn't being circulated, but in the long run it's actually beneficial because having a ton of people going broke and starving is an even bigger cost to society than having people with some money saved up for hard times. From a short term perspective it's undesirable to have a lot of people saving money, from a long term when the crash inevitably comes we'll all be better off if we have some money under the mattress.

>The economy is based on the idea that self interest benefits everyone in the long run
To a certain degree. It's not that simple, you can't reduce fixed costs to a laissez-faire assertion like that. Even Ricardo understood that if profits go up, wages have to go down. If everything were reduced to laissez-faire competition, theoretically the rate of savings would have to equal the marginal efficiency of capital, which would mean society would have to become poor theoretically in order to have capital become scarce enough so that there is a higher derivative for the marginal efficiency of capital than interest.

Theoretically laissez-faire competition would necessitate that this happen AND: certain areas being more impoverished than others, would mean that the spurs to investments originating in places which do not garner a great deal of job gains, but are more immediately profitable to the undertakers because of increased wealth due to the accumulation of capital, necessitate that the capital you would invest would, in your self-interest, not be directed to the place that benefits society the most.

>Most people would rather have a nicer neighborhood than a bigger television but those decisions are made by broken bureaucracies.
Then how come any bureaucratic decision to try and improve the community at the cost of some fat fuck buying another tv always gets decried as socialism?

You need to save to invest.
Less risk for banks and better investment opportunities.
Interest is a price for the risk of not paying back what you borrowed.

Here's this thread crossposted in Veeky Forums. Good responses overall and a nice little debate between an Austrian economist.

Economics is fascinating man.

>You need to save to invest.
They just aren't the same. Never terminologically in my opinion, though many economists differ on how they should be treated nominally.

The thing is that almost every nation on earth has a debt-based currency. The days of gold and silver are over, don't get me wrong, but 'wealth creation' is basically by fabricated numbers on a computer. Spending and attempts to spur the economy are an attempt to refill the abyss of debt. National, corporate, private, etc. Loans are granted not from a bank's reserve (which are a tiny fraction of their actual 'wealth'), but out of thin air on the basis that at some point in the future, 'real wealth' will fill the hole. Without spending, that pretence drops.

You're right. Philosophically, this trend is going nowhere. And regardless of the president, Republican or Democrat, the debt grows literally every year. Which it doesn't have to, technically.

But we don't think like that for some reason. We can't focus on the long-term, despite having very real long-term debt. We don't focus on retaining any wealth in the currency we use, just making it so the currency has less of it over time.

These are all real problems, because they are unsustainable from the perspective of real opulence, productivity, and sustainability.

econoobie

it sounds like when yo talk about the utilixation of captial from a population. It sounds like you guys are generalizing an entire population as spenders or savers.
but people are both spenders and savers.
spending money when you were a kid to buy comic books makes you a saver if you keep that.
but commerce is a function of time, and given enough time everyone becomes a spender.

also wont saving a dollar actually help the purchasing power of said dollar becuase its one less dollar in circulation. Kinda how they control diamond rates by keeping a majority of diamonds locked away in vaults.

The point being that the dollar not in circulation isn't spurring productivity like a dollar in circulation would.

but the fact that there isn't dollars coming out of the sewers that people want to work for them

if theres a lot of dollars in circulation the person has no desire to save the dollars becuase they are found in abundance and can't really buy a lot with a dollar since no one really values them.
so then the dollar doesn't really become a thing people will work for in the first place.

so maybe if the fucking fed would stop printing money everytime theres a cash shortage maybe saving money would actually do some good instead of holding up the means of production as well as contributing to the inflation.

>Yes, saving is bad for the economy

The only way saving is bad for the economy is if you put physical dollars in your mattress.

saving is investing, the bank invests it

even if you hoarde paper money it means you are helping redduce inflation and not putting a burden on material resources

These deep discussion threads in specialized boards like Veeky Forums make me feel so stupid

I would argue that saving a decent amount of money leads to more economic growth because the savers are more likely to make big purchases because they have the security of their savings to fall back on.

Like anything you need to take the long view