SAVING IS SIN, SPENDING IS VIRTUE !!!

After a long journy of my own writings ( may be inspired by some one else :-P), this is one sort am just copy pasting the article as its much better and I cant add more into this. This could be useful to anyone, Imperative for some, void for the rest.

Japanese save a lot. They do not spend much. Also
Japan exports far more than it imports. Has an annual
trade surplus of over $100 billions, yet Japanese
economy is considered weak, even collapsing. Americans
spend, save little. Also US imports more than it
exports. Has an annual trade deficit of over $400
billion. Yet, the American economy is considered
strong and trusted to get stronger. But where from do
Americans get money to spend? They borrow from Japan,
China and even India. Virtually others save for the US
to spend.


Global savings are mostly invested in US, in dollars.
India itself keeps its foreign currency assets of over
$50 billions in US securities. China has sunk over
$160 billion in US securities. Japan's stakes in US
securities is in trillions. Result: The US has taken
over $5 trillion from the world. So, as the world
saves for the US, Americans spend freely.


Today, to keep the US consumption going, that is for
the US economy to work, other countries have to remit
$180 billion every quarter, that is 2 billion a day,
to the US! Otherwise the US economy would go for a
six. So will the global economy. The result will be no
different if US consumers begin consuming less.

A Chinese economist asked a neat question. Who has
invested more, US in China, or China in US? The US has
invested in China less than half of what China has
invested in US. The same is the case with India. We
have invested in US over $50 billion.


But the US has invested less than $20 billion in
India. Why the world is after US? The secret lies in
the American spending, that they hardly save. In fact
they use their credit cards to spend their future
income. That the US spends is what makes it attractive
to export to the US. So US imports more than what it
exports year after year. The result: The world is
depend! ent on US consumption for its growth. By its
deepening culture of consumption, the US has
habituated the world to feed on US consumption. But as
the US needs money to finance its consumption, the
world provides the money. It's like a shopkeeper
providing the money to a customer so that the customer
keeps buying from the shop. The customer will not buy,
the shop won't have business, unless the shopkeeper
funds him.

The US is like the lucky customer. And the world is
like the helpless shopkeeper financier. Who is
America's biggest shopkeeper financier? Japan of
course. Yet its Japan which is regarded as weak.
Modern economists complain that Japanese do not spend,
so they do not grow.
To force the Japanese to spend, the Japanese
government exerted it self. Reduced the savings rates,
even charged! the savers. Even then the Japanese did
not spen! d (habits don't change, even with taxes, do
they?). Their traditional postal savings alone is
over$1.2 trillions, about three times the Indian GDP.
Thus, savings, far from being the strength of Japan,
has become its pain.


Hence, what is the lesson?


That is, a nation cannot grow unless the people spend,
not save. Not just spend, but borrow and spend. Dr.
Jagdish Bhagwati, the famous Indian-born economist in
the US, told Manmohan Singh that Indians wastefully
save. Ask them to spend, on imported cars and,
seriously,
even on cosmetics! This will put India on a growth
curve. "Saving is sin, and spending is virtue." Before
you follow this neo economics, get some fools to save
so that you can borrow from them and spend. This is
what US has successfully done in last few decades.