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