Hey guess what! Don't open a savings account or you could be accused of "hoarding" your money!
Yes that's right. A frugal virtue handed down for centuries is now being vilified by the Federal Reserve. According to this article: "A paper the central bank branch published this week blames the low level of money movement in large part on consumers and their 'willingness to hoard money.' The paper also cites the Fed's own policies as a reason for consumers' unwillingness to spend."
The Feds seem genuinely bewildered that people living in an uncertain economy don't want to blow every last penny on useless consumer items and would rather stash their spare cash in a savings account (or under the mattress for that matter). "So why did the monetary base increase not cause a proportionate increase in either the general price level or (gross domestic product)?" economist Yi Wen and associate Maria A. Arias asked in the St. Louis Fed paper. "The answer lies in the private sector's dramatic increase in their willingness to hoard money instead of spend it. Such an unprecedented increase in money demand has slowed down the velocity of money." [Emphasis added.]
In days past, this "hoarding" of money would be termed a "savings account" and every child from five years old and up was encouraged to have one. Smart adults socked away (oops, "hoarded") a percentage of their income for rainy days, emergencies, and retirement. But now that's bad! Baaaad!
The unspoken implication, of course, is those greedy evil middle-class Americans who insist that it's wise to have a cash reserve Just In Case are the ones responsible for taking down the economy by "slowing the velocity of money." In case you didn't get the point, the article added, "The reason that inflation hasn't kept up with gains in the money supply simply has been that people are sitting on cash rather than spending it."
Surely it can't be the government's fault that our economy is teetering on the edge of another great depression. No, it's Joe Sixpack's fault for "hoarding" his money. Gosh, how awful.
Folks, I urge you to do your patriotic duty and empty your savings account! Don't be a hoarder, be a spender! Give a single-handed boost to the economy and ensure that you too will face disaster if you lose your job! Wheeeee!