The President thinks we should be saving more.  The savings rate in this country is down but I suspect it is mostly due to people who are unemployed or underemployed needing to spend their savings to pay the bills.  Whatever the reason is, saving is a good thing to do.  To help us all save more money President Obama has suggested allowing people to take their tax returns in the form of a U.S. Government Savings bond.

U.S. Savings bonds as a savings vehicle make no sense at all right now.  This suggestion is made at a time when the U.S. Senate needs to vote on increasing the debt ceiling for the U.S. Government from $12 Trillion to $13 Trillion or face default on a national scale.  Social Security is bankrupt, Medicare and Medicaid are bankrupt, the U.S. Postal Service is operating at a loss, and Congress has approved enough spending to create a $1.6 Trillion deficit this year.  None of these things are good for our confidence in the ability of the Federal Government to pay the bonds back or the value of the dollars repaid.  Runaway spending and the current fiscal policy of the Federal Reserve will probaly cause massive inflation making each dollar you have in savings right now worth less and less.  If you have a significant nest egg it could be completely dissipated by inflation.  Thanks Congress!

President Obama has done nothing at all this year that would promote savings.  A stable dollar is the first thing that needs to happen in order for people to want to start saving money again.

Here are my suggestions to help create more savings opportunities for the American public by promoting economic growth.  1- Stop the runaway spending.  2-cut taxes across the board and watch the tax revenues increase because of the increased economic activity.  JFK cut taxes to promote economic growth and so did Ronald Reagan.  It also worked in Japan when it was tried a few years ago.  This spurring of economic growth will create new jobs which will lead to more savings opportunities.  3- Remove corporate protections.

Removing corporate protections would help restore public confidence in these all too often faceless entities ruled by profit motives.  Social pressure can be brought to bear easier on an individual owning a company as opposed to thousands of shareholders.  A known owner or owners can be influenced to buy local instead of imports and into following better hiring practices much easier than some monolithic corporation.  The stock market really is just high level gambling and trading on the perceived value of a company with little regard to the actual value of the company.  Shareholders are not adding value to the company merely as shareholders and the company gains no value either.

The profit motive needs to be balanced with other considerations like being a good neighbor and seeking to build up the community instead of just chasing another dollar.  A tidal shift of this nature would improve all of our lives.  There is nothing wrong with making a lot of money, the problem is when the desire for money crowds out more worthy motives and hurts the community.

Which plan is more likely to help you save, the President’s or mine?

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