Reviews and Views

Another Reason to Start Savings

From an article written by Justice Litle, July 14, 2009, entitled “Guess What Really Brought Us out of the Great Depression?” at http://financesense.com/editorials/2009/0714.html

Consumer savings is usually overlooked as to the real reason the US got out of the Great Depression.  World War II moved millions from unemployment rolls to the military.  Unemployment nearly vanished in months.  However, scarcity became a problem for every citizen.  Income levels rose.  Women were needed as much as men to fill job openings.  Because the country was on a war footing, a sort of “forced savings effort” was in place.  Families had to make do on an “austerity budget”, and wound up banking much of what they earned.  25 cents of every $1 earned was set aside, which setup the stage for an explosion of consumption in the years that followed the War.

This generation is never going back to “the way it was.”  However, there will be new mistakes, new insanities, and new bubbles for now and the foreseeable future.  We have a lot of savings to do.

Old New England maxim:  “Use it up, wear it out, make it do or do without.”

July 28, 2009 - Posted by Bill Wyler | Economy