House of Paine

its the wealth effect stupid

i hate things of the form

 " its the blah blah ...stupid "

  but i hate econ con speak even more

      wealth efect .....fuck u

so this is a wedding from hell 


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now what am i after

 closaing amerika's  savings  deficit.


another econ con buzzcutter
but we aren't saving enough in aggregate 

we are ...over spending 
not at the firm level

hell no
they're heavy ..savers

but as a body of households
directly ....and thru our  gubmint 


my point:

its the wealth effect

we spend more cause we're wealthier 

its independeny of our income growth 

i'm playing by their ruleshere.....

we need to slap on a wealth tax

that will cut consumption
by making us poorer at the household level

and the  added revenue 
   will cut uncle's borrowing too 


reasoning:

( and this goes back 
 to the  orthodox defense against keynes
             liquiditry trap  dilemma )

as the real value 
  of your paper assets
  rises
  we as a group of households
tend to spend more

ie
the supply side tax cuts
 by increasing wealth 
by increasing the retun on savings
and there by 
 accelerating the accumulation rate 
  of  paper asset wealth

reduced the savings rate of households
by the wealth feedback effect on expenditures

maybe the " wished for"  effect 
        a  higher savings rate 
  thru a higher return to savings   
got washed away 
in the blow back from the  consequent wealth effect 

a backward bending 
supply curve always causes 
hellish tricks like this 

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now  clearly we're talking hog wash here

all this is straight 
           thru the looking glass 
                      bizzaro think 

but   hey
at least we're bashing em in a lingo they ...understand