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A reply to McTeer. Snippet

McTeer�s endorsement of Keynes�s concept of the Paradox of Thrift is most troubling and a setback to economic education. Economy wide saving is not bad for the economy; it is the engine of economic growth. Saving does not cause recessions, it is a cure-all for economic ills. The economic problem is that Americans have not saved enough, largely because the Fed has kept rates too low, driving savers into the stock market where they were clobbered. Some have tried to refill their savings and to protect themselves from the recession, but by and large Americans continue to spend like a drunken Congress. President McTeer implores us to avoid the Luddite fallacy of keeping jobs for jobs sake�a good point. However, he has long advocated the Fed driving interest rates down to keep consumers buying more than they can afford, businesses investing in sub-marginal projects, and the propping up of businesses and investments that need to be liquidated before a real recovery can begin.