It occurs to me that as we face our collective and individual problems, we could discover the source of many problems by staring in a mirror. What we do, don’t do, believe or reject, the decisions we make are truly what matters.
Consumers built up unprecedented savings buffers during the Covid-19 pandemic, thanks to government stimulus and fewer opportunities to spend. The extra cash helped households pay down debt, buy goods like new appliances and furniture during lockdowns and take vacations once restrictions lifted. It gave businesses leeway to raise prices and hire more workers to meet stronger demand.
Economists estimate that headed into the third quarter of this year, households still had about $1.2 trillion to $1.8 trillion in “excess savings”—the amount above what they would have saved had there been no pandemic.Wall Street Journal, As Savings Slowly Shrink, Consumer Spending Is on Borrowed Time, November 21, 2022
There is no zero-sum equation which can justify the spending of trillions of borrowed dollars. As interest rates rise with inflation, the price of the economic stimulus will cost the poor and working class greatly. A political solution to a fiscal problem is never in the best interest of our citizens.
I guess I would ask, what money? The stimulus payments were not significant enough to the wife and myself to have any real impact on our lives going forward. We did curtail spending during the 2 years of shutdowns. That created some savings but we increased making savings deposits to the grandkids and that’s about it. So I don’t sense any great change in our spending or lifestyle or any reason to look at myself in a mirror over it.
The estimate of excess savings that some economists think we have may or may not be there.
Better hold on to that excess as we will need to pay off the crazy debt that is being racked up!