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April 16, 2007



I think Blodget's explanation is too simplistic. I don't think the tax code that is biased against savings accounts for a lot of the differences in saving patterns that exist across countries. For instance, why do Japanese save so much more, as compared to Americans?


Let's not exaggerate the extent of Japanese saving nowadays:

Japan is hardly such an exceptional outlier anymore, and Japanese culture hasn't changed so drastically in the last 7 years as to explain the shift. Take population structure into account - Japan's older population ought to be further along in the savings cycle - and Japan hardly looks any better than America at all,

especially when you consider the Japanese government's scarily high debt-to-GDP ratio, which makes even Dubya's America seem as prudent as a Swiss banker. It's no wonder Japanese workers are saving more than Americans - their likelihood of ever getting back a meaningful fraction of the forced social "security" contributions they've made is almost nonexistent.

gene berman

Blodgett may be eloquent--but he's just the most recent in a long line who've made the same (or closely related) points for about as long as I've been interested--and that's going back about 40 years.

But at least tax policies are somewhat amenable to the popular will. The economic problem that worries me most is what must happen when, as the inevitable result of (compounding) inflation, the currency actually begins to approach its value--as paper--and there are no other than inconvertible ones anywhere in which safety may be sought. Worldwide, nearly instant communication enormously exacerbates the potential of such catastrophe: when it's apparent, it'll already be too late. The problems of confiscatory taxation and insufficient saving pale by comparison (though, of course, their all related).

gene berman

that should be "there" in the last line (above). Funny--I do that often but cannot remember any time when I wasn't completely aware of the difference.

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