Thrifty China, Spendthrift America

But real interest rates did not fall enough, because nominal interest rates cannot go below zero. By increasing inflation, the Fed would turn real interest rates seriously negative, thereby coercing thrifty households into spending instead of saving.

Households (and countries) that were most prone to spend cannot borrow any more. To revive growth, others must be encouraged to spend governments that can still borrow should run larger deficits, and rock bottom interest rates should discourage thrifty households from saving.

Frankfurt is a divided city, policy wise the Bundesbank opposes quantitative easing and negative policy rates, while the European Central Bank is ready to do more. But Germany s thrifty savers households, banks, and insurance companies are furious about ECB policies that tax them (and others in the eurozone core) to subsidize the eurozone periphery s alleged reckless spenders and debtors.

Private savings, as a rule, can pay the costs of treatment only for the thrifty and the well off. So, unless we adopt the view that those without ample savings who fall seriously ill should quickly die (and so decrease the surplus population), a country with national health insurance will be a wealthier and more successful country.

Be thrifty for the people. Those whose duty are to be frugal must live frugally. A return to the current simple and down to earth meeting environment, we fully comprehend and welcome it. GuangAn People s Congress deputy Wang Cheng said that an efficient and practical meeting without formalism is what they want to see and in which they want to participate.