Americans hoarding cash doing more harm to their economy?

[FanEagle]

Countries get trillions of dollars in taxes all around, states get that much taxes as well, everyone is basically getting taxes from you, so if that is the case why is there no more help from the government without printing money.

Instead of spending 700 billion dollars on military every year and beating the next 26 country combined, why doesn't America only spend 20 billion dollars like a sane country on military instead and use the rest to put it aside somewhere or pay their debts off and simply help the countrymen to live a better life? That is only the military we are talking about, there are tons more other stuff that is not needed as well. Basically Americans owe the economy nothing, economy never really was for the Americans, it was for the rich, so let the rich take the fall on this one.

[imstillthebest]

I think the Americans and every people around the world is not hoarding cash.

how did you know man . what bout the rishes people . for sure they have a stock of fresh cash in thier vaults but except to poorer one because they already buy thier cash with stock of food that they will be eating for a week or two in order to save .

The only reason they are spending their cash because they need to buy all of their necessities and feed their families during the pandemic of corona virus, since most of them temporarily don't have any jobs to earn money.

rish people already have alot of food stocks with or without jobs but poor people will have nothing more to eat without a job  . with the times that there are quarantine , poor people are affected the most .

hoarding cash does harm yes because its simillar to hoarding food supplies and other needs which can harm on the economy too . when they hoard for example , some people can hardly get the item . same goes to fiat because its printed limited only

[FanatMonet]

An interesting interpretation, only right now, the "bad" ones who saved up money in case of any incidents were just protected, but the "good" ones who spent all their money right away were in a very difficult situation. And while the former are still holding on, the latter are not very good.

[STT]

Sounds incorrect, so long as cash is stored in a bank then its part of the fractional reserve system and lent out on many multiples into the economy.   Hence there no contraction from people making sure they have enough money to pay the bills next week, month or even a year forward because that cash is on a company balance sheet and being used.
  Taking cash out as notes and holding it physically I guess would have more of an effect possibly, or the idea of holding gold over FIAT but the whole deal is flawed from the concept of constant inflation to agitate growth via monetary velocity.   Its modern economics maybe but its based off constant debt which will collapse eventually.
  Capitalism is capital with the people and each person or family making sure they can survive and be productive, money has its highest use as security.  People saving as a negative is nonsense outside of politics.

[ene1980]

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.

This can be related to every country as no country is spared from these situation, people will not be spending the money as the job market is uncertain and the economist are expecting a recession much worse than the recession we had in 2008 and with that uncertainty on the rise it is better to hoard money than spending it and it will have an affect on the entire market.

[Latviand]

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.

It will really make them suffer to this pandemic more, and it will really hard for them to recover from their economic crash immediately. People should make the money move and circulate in their economy so that they will benefit from it and no one will suffer. It is not guaranteed for the people to hoard cash especially during this pandemic. People just need to understand that the money should regulate in the market so that it will not produce again any money that will lower the value of their money. You should use your money for your basic necessities that will help you survive the quarantine and not wasting it in your wallet to make it rot. If you have spare amount of money then you should help other people who are suffering from the pandemic.

[Harriti]

sorry but I support the use of money by the American people. The government is trying hard to make the money circle increase many times but people are scared and only keep cash! When money is not brought in for investment and trading, GDP is bound to plummet and Americans will likely face a recession in the coming years. Therefore, I think the American people should work together to create a positive investment spirit, which will greatly benefit the economy.

[bitbunnny]

That depends how exactly Americans hoard the money.
If it's stored in their bank accounts it's still in the financial system that and it's circulating no matter that they don't actually spend it. If they keep it at home then it's another story.
Of course that hoarding money isn't the best thing for economy especially if lasts long time and people don't spend anything but it's kind of reasonable having in mind that we are heading towards very deep crisis.

[EdvinZ]

According to economic laws, the more people spend, the stronger the economy grows. However, during the crisis, people receive much lower incomes, and prices for goods and services on the contrary grow. Businesses are trying to solve their problems at the expense of consumers. I think that ordinary citizens are acting completely appropriately, saving their money. I believe that the government should regulate the excessive appetites of businessmen who constantly raise prices, especially during the crisis, when people have less money. 

[mtwelve]

As an American I see the opposite happening - I know cases of friends who have blown their entire stimulus check within days of getting it. Same will happen for the second (likely to happen) and any others that may come after it.

[Tchulkaturin]

What can be said of an economic system that becomes more volatile when its citizens become more frugal and financially responsible?

I think the US is in the process of making cash illegal by using a few different excuses. It is precisely the hoarding of cash that makes them nervous. They want to know where the money is at all times. They want access to it. They want to know who spent how much on what.

There is very little true economics left going on in the US. It's all politics now.

[Tchulkaturin]

Its modern economics maybe but its based off constant debt which will collapse eventually.

It is collapsing right now. The debt problem is not only national but corporate. That seems to be where the real problem is. American corporations are deep in debt and don't have a way to pay it. There is a bond crisis going on right now that is suspiciously underreported by most media as the virus and lockdown are dominating the news. But corporate bonds that used to be considered investment grade are dropping down to junk status. Much of the QE we are seeing is going toward propping up the failing bond market. So the premise of the original post, that people saving money might be harming the economy, is a red herring. Individual citizens, most of whom might be holding onto a couple thousand dollars cash at the most, are not harming the economy. They are helping it. The notion that individual's holding cash could harm the economy comes from the fear of the inevitable. They want to lock down the money in bank accounts so they don't have to print more. But when the fear of printing more money leads to lockdowns of cash in addition to lockdowns of people, it is not a good sign for the future of the economy. When this does spin out of control, it will be because of corporate bailouts, not because of individuals holding cash. The bond crisis is in the trillions of dollars and growing.

[bearexin]

Lol, who goes first? While you're spending cash other people are busy holding theirs, and all of a sudden you run out of cash and things don't get any better lol. You just die of hunger. So, I am not really going to blame the people, they are doing what they feel they should be doing at this time to stay on the safe side. If you keep spending your money in the name of helping the economy, you will spend it all and the economy will still be as it is, and you will start regretting, while others have saved their own money.

So, they are not doing the wrong, it's just how it's meant to be. It's been the same in every country where the virus started. People are losing their jobs, and things are getting hard.

[Baoanhbmt]

Now is the time for a recession, and people should accept it and move on, there will be good times after this recession it's rather pathetic when politicians asks the people to spend their savings to fix the problems they had caused.  Americans can hoard their cash for as long as they want and nobody can tell them what to do with their money.Nobody can force them to spend money.Cutting costs and saving money is smart decision during crisis,you don't know what will happen and when you are about to get fired by your boss.

[camito]

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

Its been months since the pandemic started. People are starving, the government of the countries are trying their best to appeal to the situation. Economic stabilization is a big problem because of the quarantine - no trade, no movement, no cash flow happening. People hoarding money, isn't a problem. That's the only way they know how to survive and Americans are not an exemption to this, even if we say that they have the richest economy. The budget of countries are allotted to its people, considering how many it is. It is also allotted in creating vaccine. So people have the right to keep their money. Anyways, some small businesses are already in action as well as transportation so at least, money is still circulating.

[7788bitcoin]

As an American I see the opposite happening - I know cases of friends who have blown their entire stimulus check within days of getting it. Same will happen for the second (likely to happen) and any others that may come after it.

The average citizen who lost their job during this pandemic is spending money to sustain their life, the idea of people hoarding cash might be true with the rich as they do not do anything when the economic situation is not favorable but the general public is spending the money and i have seen many citing that people will invest in bitcoin when they get their stimulus package but the truth is far from that.

[South Park]

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?.

Those that are blaming the ones that are saving their money are way off base, it is true the economies of the world are based around consumer spending but it is ridiculous to ask to people to not hoard their cash and pay their debts when they do not know if they are going to have a job tomorrow, every single person and business entity does things to give themselves the best chance to survive these difficult times, this is why business are firing millions of people all over the world and yet this is seen by economists as responsible and yet when people act on response to this they are damaging the economy.

It seems they think they can do anything they want and that people are simply going to let them get away with it and while that is the case most of the time this time will be different as people cannot ignore the fact that if they lose their jobs there is not going to be anyone there to help them.

[STT]

Economics has become nonsense, its holed below the water line by politics and horrible bias to various causes rather then principles as any proper study should be considered.   Thats the shortest answer you will get to this subject, does it do harm to save the harvest for the winter?   No of course not and its silly to ever consider that but that is seriously where we are at in modern history.

American citizens should spend their cash in order to revive their country’s economy.

I should in theory dig up some figures on this but its been true for many years, debts outweigh cash available to the average citizen.   So this idea just doesn't make sense on multiple fronts, people did already spend their cash and only ignoring the debt would give leeway to consider any other conclusion.

[Gozie51]

The stimulus really is not for investment. The money is for help for feeding at least to be safe from having other issue like hunger virus and ulcer  maybe caused lack of good nutrition. But many speculation have been on that it is an investment opportunity but I will use such for the purpose of taking care of the family as it given if I were.

[South Park]

Economics has become nonsense, its holed below the water line by politics and horrible bias to various causes rather then principles as any proper study should be considered.   Thats the shortest answer you will get to this subject, does it do harm to save the harvest for the winter?   No of course not and its silly to ever consider that but that is seriously where we are at in modern history.

American citizens should spend their cash in order to revive their country’s economy.

I should in theory dig up some figures on this but its been true for many years, debts outweigh cash available to the average citizen.   So this idea just doesn't make sense on multiple fronts, people did already spend their cash and only ignoring the debt would give leeway to consider any other conclusion.

Any semblance of common sense in the field of economics has been lost, trying to save as much money as possible when things are going wrong with the economy makes complete sense, especially when according to some reports 30 million people on the United States have lost their jobs since the pandemic started, the government and economists alike cannot really ask people to keep spending their money as if nothing is happening when everyone can see that things are going in the wrong direction, it just doesn't make sense.

Fortunately it doesn't seem as if the people are really listening since there is a limit to the manipulation that governments can exercise over their citizens.