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Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: rebooted on February 16, 2015, 01:36:29 PM

Title: CNN Money advises spending vs. paying down debt
Post by: rebooted on February 16, 2015, 01:36:29 PM
From CNN Money, on low gas prices:

"What's really needed is for American consumers to feel confident enough to spend the estimated $750 they're saving on gas this year, not just save it or pay down debt. That's critical because consumer spending accounts for two-thirds of the U.S. economy."

What great advice, thanks CNN! Debt? No problem, just spend more and everything will turn out fine!

http://money.cnn.com/2015/02/15/investing/stocks-markets-investing-bubble/index.html?iid=Lead
Title: Re: CNN Money advises spending vs. paying down debt
Post by: No Name Guy on February 16, 2015, 02:00:43 PM
Why are you surprised?  This is the standard Krugman Kensyian line where spending = good and saving = bad.
Title: Re: CNN Money advises spending vs. paying down debt
Post by: Travis on February 16, 2015, 02:04:41 PM
Fox News had something like this a couple days ago.  I didn't stick around to watch the whole thing, but the premise was "Gas prices are low, but so is consumer spending. So where is the extra money going?"  The reporter made it sound like this was a concern and I'm sure she would have had some market analyst to interview who would say how this was bad for the economy.
Title: Re: CNN Money advises spending vs. paying down debt
Post by: Eric on February 16, 2015, 02:28:39 PM
Why are you surprised?  This is the standard Krugman Kensyian line where spending = good and saving = bad.

Where did you get that idea?  Because that's not a correct representation.

http://en.wikipedia.org/wiki/Keynesian_economics

Quote
Keynesian economists often argue that private sector decisions sometimes lead to inefficient macroeconomic outcomes which require active policy responses by the public sector, in particular, monetary policy actions by the central bank and fiscal policy actions by the government, in order to stabilize output over the business cycle.[2] Keynesian economics advocates a mixed economy predominantly private sector, but with a role for government intervention during recessions.

Essentially, government spending during a recession, government savings during a boom.  It doesn't really apply to individuals at all, nor does it advocate increased spending at all times.