The Pernicious Ideology of Personal Finance Scolds

[SantaFeSteve]

http://theweek.com/articles/540713/pernicious-ideology-personal-finance-scolds


Saw this person calls MMM a radical for suggesting that people save 50% of their income. 

Article is full of BS.  Sometimes its good to read these idiots just to remind myself that they are, in fact, wrong.

[Middlesbrough]

Everybody spends 50% less. Stupid stuff stops getting produced because nobody buys it. Actual technological advances are made to benefit people because if it doesnt add value, nobody buys. Humans hit greatest height without burning all the worlds resources.

[Kaspian]

What a poncy title for a meaningless article!  I think many of these people lately have been dropping MMM's name hoping to come up in search results to drive their own Google traffic.

Personal consumption currently amounts to nearly three-quarters of the economy, while the savings rate is about 5 percent. What would happen if that rate were jacked up to 50 percent overnight? The country would fall into an instant depression.

From Wiki:

"Appeal to consequences, also known as argumentum ad consequentiam (Latin for "argument to the consequences"), is an argument that concludes a hypothesis (typically a belief) to be either true or false based on whether the premise leads to desirable or undesirable consequences. This is based on an appeal to emotion and is a type of informal fallacy, since the desirability of a consequence does not make it true. Moreover, in categorizing consequences as either desirable or undesirable, such arguments inherently contain subjective points of view."

[zephyr911]

Everybody spends 50% less. Stupid stuff stops getting produced because nobody buys it. Actual technological advances are made to benefit people because if it doesnt add value, nobody buys. Humans hit greatest height without burning all the worlds resources.

An alternate refutation, and one I have developed through much consideration: one of the central truths of Mustachianism is the idea that we can all be much happier despite (or indeed, because of) dramatically reduced material consumption. The economics are secondary to the core concept of each of us (and therefore all of us collectively) being happier without digging up and processing and transporting all this shit around; on the contrary, we would simply waste less time trying to get ahead and have more shit, and in the process find that reduced economic activity meant more leisure time and more happiness.
When you look at the fact that the US's current record corporate profits are tied to squeezing record amounts of work out of an increasingly exhausted and unhappy workforce, you have to wonder why we're so concerned with economic output anyway. Sure, a bull market makes it easier for MMM types to hack the system, but in the grand scheme it's just another symptom of the fucked-up priorities that are impoverishing the rest of the nation.
I do think that if more people embraced high SR's and invested more, average returns would probably diminish. But at the same time, as our allocation of resources rebalanced, and our communities were gradually restructured over time, ever-increasing proportions of the population could live most of their lives in the Position of Strength instead of always being behind.

[ash7962]

WOW just so many thing wrong with that article that I don't even know how to put it all into words.  The biggest issue I had was how the author accuses financial bloggers of not considering how disastrous their savings advice is for the economy and how financial bloggers never address it.  He did not do enough research since MMM clearly addresses it in at least one post I can think of.  Also, he totally discounts investing which is key to the MMM way of life.  How can you even critique someone when you just ignore half of their entire message???  *head explodes*

The country would fall into an instant depression.

The reason, roughly speaking, is that money goes in circles: My spending is your income, and your income is my spending, as Paul Krugman likes to say. If we both deeply slash our spending at the same time, all we'll do is reduce our individual incomes.

Now, clearly that two-sentence model is too simple (in particular, it lacks investment), and people dispute at what point the paradox of thrift may take hold.

The above is what I think is the biggest issue of that article. 

[SantaFeSteve]

It is a huge problem for me that the author completely ignores the fact that money itself can be productive without the individual owner of said money having to work.  If people started saving 50% of their income and then buried that money in their backyard, he might have a point. But I would guess almost everyone would put that money somewhere that it would find its way back into productivity - either through investing in companies directly by purchasing equities, purchasing bonds which help finance capital projects, or even just through local bank lending/investing by putting it in a savings account. 

[Capsu78]

There is a good sized demographic that would take comfort in reading this article.  The author is writing for clicks.   
It was written for "those who feel"  rather than those that can do a little math.

[kendallf]

Probably the most true thing this guy has written (from another linked article):

"I can't speak for those who are actually wealthy, but I do have slightly more than no money for the first time in my life. Indeed, since the bottom half or so of the income ladder has basically no wealth whatsoever, I'm probably well above the median. And just like Aziz says, I haven't even bothered to open a savings account, let alone buy stocks.

Much of that can surely be chalked up to laziness and incompetence on my part."

[zephyr911]

It is a huge problem for me that the author completely ignores the fact that money itself can be productive without the individual owner of said money having to work.  If people started saving 50% of their income and then buried that money in their backyard, he might have a point. But I would guess almost everyone would put that money somewhere that it would find its way back into productivity - either through investing in companies directly by purchasing equities, purchasing bonds which help finance capital projects, or even just through local bank lending/investing by putting it in a savings account.

Just as my income is your spending, my money invested is your money borrowed. If we were all investing half our income and borrowing nothing, the precipitous decline in relative demand for capital would reduce overall returns to nearly nothing. And then what good would a millionaire portfolio do anyone?
So there is a concern, for sure. Can we all be FI at once if none of us chose to work, and still have food, energy, and consumer goods? Nope. Probably not even the majority of us. But we could all live much better just by learning to be happy with less.

[coffeehound]

There is a good sized demographic that would take comfort in reading this article.  The author is writing for clicks.   
It was written for "those who feel"  rather than those that can do a little math.

+1.

MMM as straw man! I read about 1/3 of the article, and thought, this person is too lazy to construct a reasoned argument!

This is click-whoring at its finest.

[skyrefuge]

Probably the most true thing this guy has written (from another linked article):

"I can't speak for those who are actually wealthy, but I do have slightly more than no money for the first time in my life. Indeed, since the bottom half or so of the income ladder has basically no wealth whatsoever, I'm probably well above the median. And just like Aziz says, I haven't even bothered to open a savings account, let alone buy stocks.

Much of that can surely be chalked up to laziness and incompetence on my part."

Yep. And a bit more from that article:

I know, intellectually speaking, that I should find a boring old index fund and sock my money away there. It probably wouldn't even be that hard! But emotionally, it feels like soaking it in kerosene and storing it at a fireworks show. Very easy to just put it off and do it some other time — maybe after the next time the market crashes.

In any case, these are trifling amounts of money at stake in my case. But it's understandable that young folks would be reluctant to put their hard-earned money into what has proved itself to be an incredibly corrupt system.

Basically this is a moderately-intellectual guy who is grasping for intellectually-supported reasons to absolve himself of culpability in his financial failings. "The reason I don't save is because it would hurt the economy!" "The reason I don't save is because Wall Street is evil!"

In reality, it's probably more like "The reason I don't save is because I work a job in media that pays almost nothing, live in NYC, and prefer drinking $22 cocktails than thinking about my financial future!"

[zephyr911]

There is a good sized demographic that would take comfort in reading this article.  The author is writing for clicks.   
It was written for "those who feel"  rather than those that can do a little math.

+1.

MMM as straw man! I read about 1/3 of the article, and thought, this person is too lazy to construct a reasoned argument!

This is click-whoring at its finest.

Devil's advocate here: the idea that what works for one person may not produce universally good results is a reasoned argument.
The stated concerns of a widespread shift in individual behavior producing a Paradox of Thrift, or a fallacy of competition, are real and valid.
The idea that an approach that can make me rich if I did it, but nobody rich if we all did it? Completely legitimate, and quite possible in theory for various approaches.
But (putting my quasi-Mustachian hat back on) he totally fails to prove that an MMM approach would trigger such results. He doesn't know enough about the Mustachian concept to prove it, and I think if he did, he'd realize he's wrong. His main fallacious assumption is that individual productivity goes down with spending (or, if you will, goes down with traditional workforce participation). But most Mustachians do more free work or barter work after FI, because the entire philosophy is built around valuing hard work and human interaction over profit, and thus their contributions to quality of life for both themselves and their communities are underrepresented when judged by their SR.
To actually determine whether MMM could be practiced by more than a few percentage of humans would require the gathering and analysis of much data on the habits of those who do it.

[odput]

"But until we can learn the unavoidable truth that all retirees, without exception, live off the currently-working, the simplest solution to retirement will remain forever out of reach."

Ho. Ly. Shit.

I can't even come up with words to describe this statement

[zephyr911]

"But until we can learn the unavoidable truth that all retirees, without exception, live off the currently-working, the simplest solution to retirement will remain forever out of reach."

Ho. Ly. Shit.

I can't even come up with words to describe this statement

Oh god, here come the Internet Retirement Police.
Now we're back to the question of what is and isn't retirement. I pretty much stand by the Position of Strength definition - wherein you do what the fuck you want, often conducting economically valuable activities and delivering products and services to others, without feeling the need to collect a paycheck, because FU, I Do What I Want. The typical Mustachian pursues FIRE not out of laziness but because the 9-5 is beneath them, and goes on to do useful and productive things for society, often more so than before.
This author has kind of painted himself into a corner because retirees like MMM still earn - through actual work - more income than they spend. So he is pretty much ideologically committed to the old-school definition of retirement. This could get him in trouble.

[Sid Hoffman]

Everybody spends 50% less. Stupid stuff stops getting produced because nobody buys it. Actual technological advances are made to benefit people because if it doesnt add value, nobody buys. Humans hit greatest height without burning all the worlds resources.

Yeah exactly, that's the real impact of people spending less.  When you reduce your total spending, you're generally going to reduce spending on stupid stuff.  Thus the remaining money is being put towards "good" stuff.  This means more jobs shift away from companies that make stupid stuff and more jobs become available at awesome places that make the world better.  With more people working at awesome places, the world is made a better place more quickly.

Advance society quicker by not buying stupid stuff.

[MrMoogle]

If instantly everyone started saving 50% of their income, the market would likely crash, because earnings would drop.  Half of the companies would cease to exist, because they only provide entertainment. 

But this isn't going to happen instantly.  And there are a lot of different types of people in the world.  There will always be people who spend all their money.  Honestly, if 10% of Americans becomes Mustacians, that will be huge success.  If you look worldwide 50% of the population is probably Mustacian, because they can't afford to be anything less.

[Another Reader]

Nothing like a good old fashioned socialist.  Take this statement, for example: "...wealth is collectively produced and then privately appropriated through social relations of production and property rights."  Or "All this adds up to a classically American failure of excessive individualism. "  And "We have a social insurance-style retirement program (Social Security) that has been an extreme success."

We frugal FIRE types subscribe to "radically individualist views."  Oh, the horror!  We are just a bunch of do-nothing overlords, taking advantage of the real producers of "wealth."

The real truth is the author is the pernicious ideologue.

[SantaFeSteve]

The real truth is the author is the pernicious ideologue.

+1

[Middlesbrough]

If instantly everyone started saving 50% of their income, the market would likely crash, because earnings would drop.  Half of the companies would cease to exist, because they only provide entertainment. 

But this isn't going to happen instantly.  And there are a lot of different types of people in the world.  There will always be people who spend all their money.  Honestly, if 10% of Americans becomes Mustacians, that will be huge success.  If you look worldwide 50% of the population is probably Mustacian, because they can't afford to be anything less.

I think the opposite. The market would sky rocket as everyone would pour money into investments. PE's would go sky high and nobody would be able to continue to make money off having money. After a generation or so everyone would be working to be productive again, but it would likely look a lot different than it does today.

[db_cooper]

My favorite quote from that article:

 "Unless someone is around in the future to redeem your old money for goods and services, all that savings is for naught."

Who does he think we're saving for?  I'm saving for future ME!

[Another Reader]

In the workers' paradise, there is no need to pay rent for land or capital and there is no profit that must be made.  The "means of production" are commonly owned.  Therefore everyone will need to work a lot less, since the motivation for excess production will cease to exist.  Of course, old retired folks will still be living off younger workers.  That's ok, because in the workers' paradise the demand is "from each according to his abilities, to each according to his needs."

[EarlyStart]

Ideology aside, the people who write these articles don't know shit about economics. When money is saved (even aside from it's investment purposes), it's not gone forever. At some point it will be spent on consumption, even if it's your heirs, a charity, etc.


The money I save today is -consumption today, +consumption future. The money current retirees are spending is -consumption yesterday, +consumption now. Wealth and consumption aren't destroyed in the process.

There are other economic issues with the article. For example, if the savings rate was continually and exponentially increased, the marginal return on investments and capital expenditures would be decreasing. Some people wouldn't find it worth it. They'd go back to spending more. Due to less demand for the goods and services and the consequential lower prices buying good X would be a better deal than it was before. There's an equilibrium.

[Sid Hoffman]

In the workers' paradise, there is no need to pay rent for land or capital and there is no profit that must be made.  The "means of production" are commonly owned.  Therefore everyone will need to work a lot less, since the motivation for excess production will cease to exist.  Of course, old retired folks will still be living off younger workers.  That's ok, because in the workers' paradise the demand is "from each according to his abilities, to each according to his needs."

Except Marxism (who you are quoting) has devolved into military dictatorships pretty much everywhere it's been attempted and the nations in question tend to fall far behind their democratized neighbors.  When people don't get to own things anymore, they lose the motivation to innovate and work productively compared to when they can own things.  Theory versus reality.  Marx ignored the psychological aspect of what motivates people to work in the first place.

[Another Reader]

I guess I was not as obviously sarcastic as I thought....  As I said up thread, the author is a good, old fashioned socialist and HE is the pernicious ideologue.  The only people that still believe this nonsense are people with no real world experience - isolated ivory tower academics and wet behind the ears college students. 

[RetiredAt63]

They aren't the only ones.  I once heard a right-wing radio talk show host say that we shouldn't retire until much later (i.e. in our 70's, not the standard 65) because in retirement we don't contribute financially to society, no taxes, no nothing.  Um, I'm retired, I sure am paying taxes (and glad to, because it means I have income to pay tax on) and I still spend money which goes to my local economy.

If he thought this all by his lonesome that would be OK, but this guy has a big radio audience, and now there are probably a bunch of people who think all pensioners are benefiting at the public trough at their expense.

Ideology aside, the people who write these articles don't know shit about economics. When money is saved (even aside from it's investment purposes), it's not gone forever. At some point it will be spent on consumption, even if it's your heirs, a charity, etc.

[Scandium]

Came to this late, but wow.

Some great points.
Saving money, beyond 5% is:
- impossible for everyone, because some people are poor
- a bad idea because the economy would stop.
- a bad idea because there are financial scam artist (WTF?) (Or this argument's cousin: "I don't invest in stocks because bernie madoff")
- too much work learning about investments etc.

Ok, the last point may make some sense. But then I see how much time people spend reading celebrity gossip magazines, watching reality shows, studying minute details of sports for hours. Yet they can't take a few hours to learn something that is critical to the next 60 years of their lives??! I get shit for not knowing anything about football, but at least I know the ER of our 401k options.

And the crux of course: build out social security! Whatever that means. Pay more in? Everyone rely on the government? Some left-wing wet dream for sure.

[Mr. Green]

"The scold focus is solely on accumulating a big enough money pile for oneself, never on the broader economic ecosystem that supports that wealth."

I read this sentence and all I could think of were the Socialists in Atlas Shrugged saying, "Spending money is for the greater good! It is your civic duty to spend the money you earn to support your fellow man!"

What an idiot.

[nereo]

"But until we can learn the unavoidable truth that all retirees, without exception, live off the currently-working, the simplest solution to retirement will remain forever out of reach."

Ho. Ly. Shit.

I can't even come up with words to describe this statement

My thoughts exactly.  I don't even see it as a Internet Retirement Police issue like Zephyr911 does (although he certainly brings up a good point).
It assumes of course that retirees aren't working at all, but also that retirees are dependent on programs like Social Security.  For those under 62 (or 65/67/70.5) that's unlikely to be the case.    It also seems to make the fantastic leap that somehow investments are somehow burdening the 'currently-working,' as if workers in publicly traded companies were just thinking "if only old people would stop investing in our business we'd be free from the tyranny of paying them dividends and building out business!".
Ironically, his poorly defined 'solution' seems to for people to work longer and then be dependent on government assistant programs.  Which of course are paid for by workers (past and present).

[zephyr911]

"The scold focus is solely on accumulating a big enough money pile for oneself, never on the broader economic ecosystem that supports that wealth."

I read this sentence and all I could think of were the Socialists in Atlas Shrugged saying, "Spending money is for the greater good! It is your civic duty to spend the money you earn to support your fellow man!"

What an idiot.

Randian caricatures of socialism are retarded. If you take any philosophy and push it far beyond its logical limits, of course it looks ridiculous. Using a caricature of one idea to push an equally extreme version of another is disingenuous, even dishonest. But this author, on the far end of the spectrum, is committing the same type of distortion, by ignoring the big-picture humanitarian impact of Mustachianism - part and parcel of its stated aims. It's not just about living on less until you can say "screw you, I got mine" and run off with the bag; it's about crafting a better world for all of us by killing consumerism and realigning the allocation of resources under a quality-over-quantity approach that strains the environment less while improving our lives.

Kind of a side note, but: most high-functioning societies do incorporate a moderate level of collectivization - because a dog-eat-dog, every-man-for-himself world is a shitty one, often plagued by social discord, as is a world where abilities and effort are squashed to produce identical outcomes for all.

[nereo]

But this author, on the far end of the spectrum, is committing the same type of distortion, by ignoring the big-picture humanitarian impact of Mustachianism - part and parcel of its stated aims. It's not just about living on less until you can say "screw you, I got mine" and run off with the bag; it's about crafting a better world for all of us by killing consumerism and realigning the allocation of resources under a quality-over-quantity approach that strains the environment less while improving our lives.

This. I really like your definition - certainly beats the kneejerk explanation that this it's a blog (and forum) about "extreme frugality."

[zephyr911]

But this author, on the far end of the spectrum, is committing the same type of distortion, by ignoring the big-picture humanitarian impact of Mustachianism - part and parcel of its stated aims. It's not just about living on less until you can say "screw you, I got mine" and run off with the bag; it's about crafting a better world for all of us by killing consumerism and realigning the allocation of resources under a quality-over-quantity approach that strains the environment less while improving our lives.

This. I really like your definition - certainly beats the kneejerk explanation that this it's a blog (and forum) about "extreme frugality."

Really just a paraphrase of various MMM quotes. He is so adamant about "not extreme frugality" that he wrote an entire article dispelling that misconception.

[economist]

My Speculative, but at least as valid as the "The Economy will collapse without McMansions and Ford F150 Pickups" Theory:
1. The shift to Mustachianism will be gradual, a few percent of people, then 10%, then 20%, it won't be all at once.
2. As savings increase, returns on capital will decrease, meaning you need a bigger nest egg to retire.
3. However, as more people retire, labor will become scarcer and so wages will increase, thus, it will take less time to accumulate the larger nest egg.
4. As we reach critical mass where 50% or more of the population is retired, the massive amounts of capital invested will be used to develop robots to replace the humans who have retired. Eventually, all work will be done by robots, and everyone will own stock in the companies that make the robots. Voila, 100% of the population will be retired, all work will be done for pleasure, and only robots will have to do dangerous or unpleasant jobs.
5. In the year 3000 the robots adopt Mustachianism and THEN the economy collapses.

[bostonjim]

"But until we can learn the unavoidable truth that all retirees, without exception, live off the currently-working, the simplest solution to retirement will remain forever out of reach."

Ho. Ly. Shit.

I can't even come up with words to describe this statement

I think you are misunderstanding this statement.  What he is saying is that retirees depend on real resources - food, energy, housing, etc. - that must always be provided out of current production. 

In order to have a percentage of the population not working, those that are working must produce enough to not just provide for their own consumption, but also for those who are not producing (children, retirees, Knights and Lords (if you're into the whole Feudal thing)). 

This transfer always has to happen, but can happen in different ways - in the absence of any money, there could be direct confiscation and redistribution (a la the granaries of Ancient Egypt).  There can be taxation and transfer payments.  Or there can private investments that pay a return.  Underneath it all, the same transfer is taking place - there is production over here, and consumption over there - it's just the mechanism that changes.

This is what drives some of us mad about those who say "Social security is going to go broke because there won't be enough workers, so we need to have private accounts!": as long as there is enough surplus, we can support retirees - and if there isn't we can't.  If "there aren't enough workers", we would no more be able to feed everyone via "private accounts" than via Social Security (mmm, yummy stock certificates - I hear they go great with a side of broiled bonds!)

Fortunately, we will be able to feed anyone (barring catastrophe), even with a declined number of workers - the estimates I hear are that somewhere around 10-15% of the current workforce grows all the food, builds all the buildings, and manufactures all the goods that we use - the rest of us mostly sell stuff back and forth to each other.  As our robot overloads (who I, for one, welcome!) take over, this will only decrease.  So what percentage of the necessary redistribution going forward will be done via taxes and transfer payments vs. private savings is a political decision, not an "OMG! Trust fund! Broke! Cat Food!" crisis...

[Elderwood17]

5. In the year 3000 the robots adopt Mustachianism and THEN the economy collapses.

Mustachian Robots!  Of course.......we knew it would end at some point.

[zephyr911]

"But until we can learn the unavoidable truth that all retirees, without exception, live off the currently-working, the simplest solution to retirement will remain forever out of reach."

Ho. Ly. Shit.

I can't even come up with words to describe this statement

I think you are misunderstanding this statement.  What he is saying is that retirees depend on real resources - food, energy, housing, etc. - that must always be provided out of current production. 

In order to have a percentage of the population not working, those that are working must produce enough to not just provide for their own consumption, but also for those who are not producing (children, retirees, Knights and Lords (if you're into the whole Feudal thing)). 

And, as we discussed above, that counterargument is 100% dependent on the traditional definition of retirement.
If everyone tried to do MMM and retire at 35, never working again, things would go badly.
But MMM works plenty - in fact, it turns out his ongoing leisurely economic activities are more than enough to fund his family's lifestyle, such that all their investment returns (and then some) are just piling up as they get reinvested. That's because for him, and for many people who take this path, retirement doesn't mean sitting on the couch with a beer. It means working hard, when you want to, to accomplish things that are important to you.
I personally plan on working plenty after I stop punching the clock. I plan on producing things of substantial value - more than what I consume/require myself... the only difference will be that I don't have to obsess over making a boss happy or earning a certain amount of money to pay bills.

[starguru]

"But until we can learn the unavoidable truth that all retirees, without exception, live off the currently-working, the simplest solution to retirement will remain forever out of reach."

Ho. Ly. Shit.

I can't even come up with words to describe this statement

I think you are misunderstanding this statement.  What he is saying is that retirees depend on real resources - food, energy, housing, etc. - that must always be provided out of current production. 

In order to have a percentage of the population not working, those that are working must produce enough to not just provide for their own consumption, but also for those who are not producing (children, retirees, Knights and Lords (if you're into the whole Feudal thing)). 

And, as we discussed above, that counterargument is 100% dependent on the traditional definition of retirement.
If everyone tried to do MMM and retire at 35, never working again, things would go badly.
But MMM works plenty - in fact, it turns out his ongoing leisurely economic activities are more than enough to fund his family's lifestyle, such that all their investment returns (and then some) are just piling up as they get reinvested. That's because for him, and for many people who take this path, retirement doesn't mean sitting on the couch with a beer. It means working hard, when you want to, to accomplish things that are important to you.
I personally plan on working plenty after I stop punching the clock. I plan on producing things of substantial value - more than what I consume/require myself... the only difference will be that I don't have to obsess over making a boss happy or earning a certain amount of money to pay bills.

Yeah the one correct item in the otherwise ridiculous writing is that if everyone saved 50% of their take home, the economy would go into depression. 

You could always counter that after it recovered we would be on a much more sustainable path. 

However, I think the broader point is missed.  People don't need to save 50% of their income to be financially responsible.  The problem is people save *NOTHING*.  If everyone maxed out just an IRA over the traditional 40 year career we would be in such better shape as a country.  This is why I would support laws that mandate saving. 

[nereo]

"But until we can learn the unavoidable truth that all retirees, without exception, live off the currently-working, the simplest solution to retirement will remain forever out of reach."

Ho. Ly. Shit.

I can't even come up with words to describe this statement

I think you are misunderstanding this statement.  What he is saying is that retirees depend on real resources - food, energy, housing, etc. - that must always be provided out of current production. 

Bostonjim and others see this as a more benign statement than I do, and perhaps that is how it was intended.  My issue with these statements is that they are a backhanded way of saying people who aren't currently working are a drag on the economy and society.  From there it's only a short step towards proposals that will minimize and marginalize retirees, particularly early-retirees. 
Besides the 'paradox of thrift' argument which starguru touched on, I completely reject the idea that an early retiree with substantial investments is 'liv[ing] off the currently-working'.  Investments help businesses run and grow.  It also completely ignores that almost all retirees are spending money that they stockpiled during their working years by not spending as much, by avoiding huge debt payments (which are parasitic to an economy) and by investing in businesses (equities) and their governments (bonds).
Finally, as zypher911 pointed out, it's a fallacy to think that early retirees do no useful work.  Not only are they spending money they saved during their "productive workplace years", but they have hobbies, join clubs and participate in their communities.  Take a look at virtually any community program and you will find a large number of retired and stay-at-home individuals running things behind the scenes.  Whether they are paid or not, they are contributing to society, and many of them are arguably contributing more than someone who works full time, has every credit card maxed out and is paying the majority of their weekly earnings just to finance that debt.

[BlueMR2]

Ah, another "velocity of money" article.  I thought that foolishness was disproved years ago...

[TheFixer]

These extremist articles are just pointless click bait.

What if nobody saved & invested any money? OMG the economy collapses.
What if everybody saved & invested all the money? OMG the econmy collapses.
What if everybody only bought new cars, thereby making used cars worthless scrap that destroyed the planet? OMG planet destroyed.
What if everybody only bought thrifty used cars, putting all domestic pickup truck makers out of business? OMG economic implosion.

For now I will keep trying to use resources efficiently and save & invest money.  Others will save more and most will save nothing.  Global economy chugs on.

[TheGrimSqueaker]

I hope that I, too, can be called "pernicious" one day.  It sounds slightly naughty, in a sexy sort of way.