India, A country where elders always advise their sons & daughters to save money. And after the recent global meltdown it is quite obvious that its a good habit. Now, even Americans have started saving money but according to economists there it is a matter of concern as in this recovery phase if people won't spend, the recovery would be slow and which may depress many people and which may create another slowdown.
But how Saving can be a problem as it helps one to use his saving in need. Economists are right about the fact that people should spend which helps to rotate economic cycle and helps to create more jobs. But they are missing a point, If people start spending like before it may shorten the economy cycle. and may be again in few years we see another depression. If people save some money, the recovery would be little slow but it will help the economy build it self with greater strength.
I think government can address both this issues. Government should direct all the employers small or big, deposit salaries of all their employees in a bank account. Bank will create savings account for all the employees and they will deduct 10% of their salary and allow them to spend or take credit on remaining 90%. This process will serve 3 purposes, it will help government to track black money, help banks to track defaulters, and help the economy to sustain itself for a longer period.
This is just an opinion. have a thought.
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