More Communist Than China (Part 3,595)

clipped from www.ft.com This is easier said than done. If China stops financing the US deficit or US consumers stop spending too rapidly, the crisis will enter a new, darker chapter. In the longer term, making China less parsimonious and the US less voracious means re-engineering both economies. Re-establishing habits of thrift in America will be painful; no one wants to cut consumption. Chinese demand is limited by workers’ income, which is a mere 40 per cent of national output. Demand also suffers because, lacking a robust social security system, Chinese consumers save up as insurance against illness and unemployment. Building a social safety net and redistributing money from Chinese corporations to workers would mark a generational shift with serious consequences for the elite.

Bet you didn't know why the Chinese saved so much, eh?

Have you ever even considered the fact that Social Security is just yet another moral hazard working against savings? And by logical extension, investment?