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by tapp 3614 days ago
What is the difference between "hoarding cash" and "saving" besides the fact that one sounds evil and the other virtuous?

(I don't intend that as a rhetorical question - I'm sincerely asking.)

2 comments

Saving (as distinct from investment in productive things) is also bad for the economy. A small amount of buffer may smooth the working of the economy, but stored cash/assets are dead weight - it's better if people are spending immediately, keeping the cash circulating into productive things.
> but stored cash/assets are dead weight

Curious, are US treasuries or interest in a savings account considered "dead weight" in your definition?

Not completely dead but close to it. To the extent that they provide funding for government infrastructure, business loans and the like, they're productive. But AIUI that link is pretty thin these days.
If investing in Treasuries and Savings accounts are considered hoarding or "dead money" that's +/-$13T to $19T depending upon how you look at it for Treasuries [1] and $8.6T for savings [2].

[1] http://treasurydirect.gov/NP/debt/current [2] https://fred.stlouisfed.org/series/WSAVNS

"Saving" usually refers to investments which are then loaned out to increase the velocity of money while "hoarding" does not.