Hans Gruber: Who are you, then?
John McClane: Just a fly in the ointment, Hans. The monkey in the wrench. The pain in the ass.
--Die Hard
The monkey in the wrench of any current secular economic growth story continues to be declining savings. Present policies encourage consumption over savings. This is the worst thing we could do given our chronically low and shrinking savings position.
Savings are the lifeblood of economic improvement. Without savings there is no capital for productivity improvement. We are currently engaging in capital consumption rather than capital formation.
Poor countries are not poor because they lack formal education. Know how can be transferred informally. In fact, formal education requires savings and capital.
What poor countries lack is savings that can be applied toward productivity improvement (increased wealth generation).
We are becoming a poor country.
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Everything we get, outside of the free gifts of nature, must in some way be paid for. The world is full of so- called economists who in turn are full of schemes for getting something for nothing. They tell us that the government can spend and spend without taxing at all; that it can continue to pile up debt without ever paying it off, because "we owe it to ourselves.
~Henry Hazlitt
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