Americans hoarding cash doing more harm to their economy?

[Juggy777]

In these uncertain times Analysts have struck a nerve by claiming that American’s are destroying their economy by hoarding cash, and they feel that the American citizens should spend their cash in order to revive their country’s economy. In my personal opinion I don’t think that American citizens are wrong to hoard their cash, due to uncertainty surrounding their jobs. What are your views on this matter should America’s citizens sacrifice their savings in order to save America’s economy, or should they continue to save cash but unintentionally continue to harm America’s economy?.

Americans are slashing their spending, hoarding cash and shrinking their credit card debt as they fear their jobs could disappear during the coronavirus pandemic.’

“I love how the blame immediately goes to the average American, instead of oh, I dunno, the 1% and these megamillionaires buying back their own stocks right now,” he said. “People are just trying to survive and feed themselves right now, and we’re supposed to care about the big picture?”

“Although caution is a logical response to that uncertainty, hunkering down also poses a risk to the recovery in an economy dominated by consumer spending,” reporter Matt Egan explained. “A so-called V-shaped recovery can’t happen if consumers are sitting on the sidelines.”

Source:

https://www.marketwatch.com/story/the-us-economy-is-facing-a-new-threat-consumers-are-being-too-responsible-with-their-money-2020-05-13

[avikz]

It's not just about America only. People from any country are hoarding cash at whatever amount they can, especially those who are still having a stable jobs. I am seeing this trend in almost all of my colleagues and the same is being done by me as well. Since I am not traveling to office or not going to a restaurant or even not going for a movie, I am able to save a good amount of money every month which I am either investing in stocks or bank deposits.

I don't think American or any one who is hoarding money, isn't doing anything wrong. The situation is very uncertain and no one really knows when their job will be lost. So it's a perfect thing anyone can do at this time - save for future! No blame to be given!

[crwth]

Is that the big cause of the current economy today? I don't think so. The economy is hurt because no one could spend their money where they want to because most of the stores or places that you can spend it on are closed. The main reason why stock markets crashed because people started cashing out their investments and that is one of the reasons for the "cash hoarding".

Everything is connected to the current pandemic and I hope it will get better soon. The current economy will recover for sure.

[boyptc]

They hold the cash and it's in their pocket, they can do whatever they want. And even if their government will force them to spend it, I think that many will oppose it and will still keep holding it.

People's concern isn't about the economy but their stomachs and how to survive in this pandemic.

[mu_enrico]

People are free to choose what they will do with their hard-earned money. I think whoever says about using savings to "help" the economy is wrong. People will consume and continue to consume as long as they are alive.

Now is the time for a recession, and people should accept it and move on, there will be good times after this recession, as always.

[exstasie]

In my personal opinion I don’t think that American citizens are wrong to hoard their cash, due to uncertainty surrounding their jobs. What are your views on this matter should America’s citizens sacrifice their savings in order to save America’s economy, or should they continue to save cash but unintentionally continue to harm America’s economy?

Of course they're doing nothing wrong, but it's an interesting dilemma. Easy credit and low unemployment created a situation where no one was saving money for years. Now that consumer credit is tightening and unemployment is through the roof, we're seeing the opposite.

Doesn't bode well for an economic recovery when consumer spending accounts for 70% of GDP.

I anticipate more stimulus checks as a band-aid solution but with how bad things are, lots of people will just hoard those too.

[Coyster]

I would not buy over what i need just to save the economy of my country, if you start spending that way you'll go low on your savings and if it runs out, you're surely not running to the government for help then. For as long as this recession and uncertainty on employment continues, people will spend only on what they consider to be necessary needs.

The American government would find a way to revive their economy one way or another, and since people still pay for necessities, the government still receives a fraction of people's savings. The situation is the same everywhere in the world, even in the underdeveloped countries with a far worse economy, so I'm sure the American government can handle this situation the same way it's handled worldwide and even better.

[Ucy]

In my opinion, it's better to get the people spend the cash on good basic needs and not on things that are bad and not really needed. People should be aware of what their money should be best spent on, or you just guarantee that those basic needs always get to them until the crisis is over. But governments are more concerned about their GDP/growth whether good or bad.

And i believe we should be helping/serving one another to the best of our abilities to keep things going in time of crisis like this. There should be less sitting idle with no work.

[palle11]

I don't think they are really hoarding money because if they do, they might not push out stimulus for the people. They want to start the economy and there is need to make money available for investment. Investment is what can grow the economy again after the economy has sweezed because of covid-19 problem.

[suchmoon]

There isn't that much money that could be "hoarded". A lot of people live paycheck-to-paycheck and are deep in debt so they don't really have any cash to hoard. Banks have tightened some borrowing requirements so getting deeper into debt isn't easy either. And for what little money there is, some of the spending options have diminished.

Gas is cheap and there is far less driving due to shutdowns/lockdowns (car sales are down by like 80% too). Lots of businesses closed. Online shopping is infuriating - lots of stuff you need is out of stock, delivery is slower than usual. There is only so much you can spend on food. Luckily home improvement stores are still open in most places so if you want to repaint the house or take up gardening - great time to do it.

But the money that's "hoarded" won't disappear. It will get spent somewhere eventually, just on different things probably. The main thing is for businesses to start rethinking how they serve their customers. E.g. restaurants will have to change the way they do business - even if everything magically reopens, I think people will be reluctant to eat in restaurants for quite a while.

[shoreno]

I don't think they are really hoarding money because if they do, they might not push out stimulus for the people.

i thought op is refering to the people and not to the governments   .  so what if people will hoard thier cash ? does that mean that government will not give them stimulus ?  no thats not good  .  its the governments role to provide help to the public if they see that public are on great danger   .

hoarding money is not bad but its the best thing to do right now actually because we dont know if when the virus last and we dont know if when will our jobs resume   .

[Hydrogen]

The media encourages incompetent and irresponsible behavior. It encourages women to cheat on their boyfriends/husbands, sleep around, be irresponsible & disloyal. It reinforces irresponsibility in financial, savings and spending habits.

The media defers blame away from real problems to prevent the public from comprehending real issues. In the way that health insurance is a scapegoat for everything wrong with american healthcare. To truly put "cash hoarding americans damage the US economy" headlines into perspective. One must view it for what it is -- psychological warfare(psyops).

The motive behind illustrating savers in a negative light is to deflect blame away from governments banning non-essential sectors of economies. Otherwise obstructing normal economic activity. Blaming savers instead passes the buck without challenging the popular belief of governments acting strictly in favor of the public good.

[Upgrade00]

I wouldn't call it hoarding cash, rather people are only interested in spending money on essentials at this point in time. Lockdown is in effect in many parts of the world, and even in places where it isn't, people are a lot less inclined to engage in outdoor activities and this means less purchases. The tourism market is one of the worst hit this period.
The reluctance to spend cash is reinforced by the rate of income flow, lots of individuals have been subjected to temporary and permanent unemployment, coupled with the uncertainty of when a this would be over; people will not want to run out of cash.
Businesses would have to restrategize inorder to remain relevant now;
• Having an online presence has become all the more relevant, in addition to this; being able to reach out to your customers, to delivery service would come in handy
• Social media platforms, online schools and pharmaceutical should be the most thriving businesses this period.

[coolcoinz]

I was never a supporter of these socialist mottos of working together to help the economy. To me it's rather pathetic when politicians asks the poeple to spend their savings to fix the problems they had caused. The worst part of it is that they haven't done it for free. They took our tax money and spend them, but that wasn't enough. Now we have to spend the rest because otherwise it all goes to shit. Why don't the politicians start spending their so called "hard earned money" and sell some of their summer villas and exotic cars?
When you see people not spending the money it means they no longer feel safe and its the government's job to make them feel safe again. Telling them to start spending, or else, is only going to make things worse.

[justdimin]

Of course economists will think that the american people should be spending their cash, but are they really offering them things to spend their cash on?

I mean lets look at the reality, there are few people who are left with job right now, over 30 million people are affected with this pandemic and that means there are few people who are earning enough to survive as well, and there are even fewer people who are even saving cash right now, and those people are doing it because they know that maybe they are next on getting fired, and they are saving money just in case something like that happens. It is a smart decision when the whole economy fails them, they will fail the economy as well. What was economists were waiting on? The people spending like nothing happened?

[The Cryptovator]

Is the current problems only for American? Everyone hoarding cash on the world and that's how global economy collapsing. What is the other option except hoard? Because industrialists and businessmens aren't able to spend their money due to worldwide lockdown. All the system collapsing day by day. Who have enough money they are hoarding and who don't have enough money they are even unable to feed their families. Economy will be more imbalance if the global epidemic continues like this. Even hoarding money harm for economy but fortunately there is no any second option expect donate. Hopefully Americans will be to speed up by their hoarding money after the global epidemic.

[electronicash]

everyone holds their cash because they can't spend it anywhere as well. companies are closed and we're all locked in our homes, where could they spend their cash but hold. the good side is that they are preventing the virus from spreading by hoarding. but the cash has to circulate for the economy to run. US didn't still sanitize their bank notes?

i'm hopeful that every country that did quarantined their bills are trying to move their money into digital.

[dothebeats]

In hard times like these, you can't expect the citizens to spend especially if there aren't enough incentives that can lure them to do so. The economy is on a shit show currently with millions upon millions of people being unemployed with no jobs available anywhere. The only thing they have left are cash on hand that they are trying to save to buy necessities and stuff, and you can't expect them to buy things that are not on the important list. Besides, there aren't much shops that you can walk right into and buy whatever they are selling currently.

The government subtly forcing people to spend is really getting on my nerves. They can do everything in their power to fix the economy and not let it go to shit but they are doing otherwise. Then they expect the citizens to attend to the problems they did themselves and put the blame on us for not doing our part.

[abhiseshakana]

The view of saving in this situation is good, so it is better to save money in a bank with the assumption that it still earns interest and is relatively safe. But when the economy stagnates and leads to recession, depression, and the great depression, things will get more complicated and the effects will be very detrimental.

The existence of a bank interest system ultimately causes the money that could have been an economic lubricant in the real sector to accumulate and accumulate in some people, this is what makes the reluctance to invest which ultimately impacts the economic stagnation due to lack of lubricant.

In a pandemic condition like this, it still needs to be highlighted humanity, unless we think that this is natural selection. I am sure many investors can return or move back to a dead business, but we will not be able to revive a dead person.

Thought is better to save than to help the economy move including reasonable thinking in this situation but also very selfish. Spinning the wheels of the economy does not have to spend fantastic value. We can join the equity crowdfunding program to become a mini investor in helping the economy cycle. Strengthening the community economy with the independence of small communities is one way to make small rounds, if many do, then these small rounds will move the country's economy and moreover in the real sector not just on paper.

[The Sceptical Chymist]

In these uncertain times Analysts have struck a nerve by claiming that American’s are destroying their economy by hoarding cash

Who are these analysts and why should they be listened to?  And the whole reason people might be hoarding cash is precisely because the current times are uncertain. 

I don't listen to the blabbering talking heads on the news or anywhere else.  I've found that I can live my life just fine without paying attention to the news, and I bet a lot of other folks could do just fine without it as well.  Seems like they've made up a non-issue to discuss here, which is generally what happens when they run out of legitimate topics.